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What changed in SIMMONS FIRST NATIONAL CORP's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of SIMMONS FIRST NATIONAL CORP's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+335 added−357 removedSource: 10-K (2025-02-27) vs 10-K (2024-02-27)

Top changes in SIMMONS FIRST NATIONAL CORP's 2024 10-K

335 paragraphs added · 357 removed · 271 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

55 edited+17 added−37 removed114 unchanged
Biggest changeSection 22(h) of the Federal Reserve Act and its implementing regulation, Regulation O, prohibits loans to any directors, executive officers, and principal stockholders and their related interests where the aggregate amount exceeds an amount equal to 15% of an institution’s unimpaired capital and surplus plus an additional 10% of unimpaired capital and surplus in the case of loans that are fully secured by readily marketable collateral, or when the aggregate amount on all of the extensions of credit outstanding to all of these persons would exceed the Bank’s unimpaired capital and unimpaired surplus.
Biggest changeAmong other things, these loans must be made on terms substantially the same as those prevailing on transactions made to unaffiliated individuals, except that such insiders may receive preferential loans made under a benefit or compensation program that is widely available to the bank's employees and does not give preference to the insider over the employees, and certain extensions of credit to those persons must first be approved in advance by a disinterested majority of the entire Board of Directors. 10 Section 22(h) of the Federal Reserve Act and its implementing regulation, Regulation O, prohibits loans to any directors, executive officers, and principal stockholders and their related interests where the aggregate amount exceeds an amount equal to 15% of an institution’s unimpaired capital and surplus plus an additional 10% of unimpaired capital and surplus in the case of loans that are fully secured by readily marketable collateral, or when the aggregate amount on all of the extensions of credit outstanding to all of these persons would exceed the Bank’s unimpaired capital and unimpaired surplus.
Notwithstanding that federal banking agencies will not take action with respect to these enhanced prudential standards, the Company and its subsidiary bank will continue to review their capital planning and risk management practices in connection with the regular supervisory processes of the FRB.
Notwithstanding that federal banking agencies will not take action with respect to these enhanced prudential standards, the Company and its subsidiary bank continue to review their capital planning and risk management practices in connection with the regular supervisory processes of the FRB.
The extent to which any such additional future assessments will impact our future deposit insurance expense is currently uncertain. Community Reinvestment Act The Community Reinvestment Act of 1977 (“CRA”) requires that federal banking agencies evaluate the record of each financial institution in meeting the credit needs of the market areas they serve, including low and moderate-income (“LMI”) individuals and communities.
The extent to which any such additional future assessments will impact our future deposit insurance expense is currently uncertain. 14 Community Reinvestment Act The Community Reinvestment Act of 1977 (“CRA”) requires that federal banking agencies evaluate the record of each financial institution in meeting the credit needs of the market areas they serve, including low and moderate-income (“LMI”) individuals and communities.
In recruiting, we employ a variety of strategies, including, among other things, the use of in-house recruiters, search firms, and employment agencies, designed to attract qualified and diverse candidates. Among other opportunities, we offer student internships and a banker trainee program that provides recent graduates with the opportunity to gain insight into several Company departments.
In recruiting, we employ a variety of strategies, including, among other things, the use of in-house recruiters, search firms, and employment agencies, designed to attract qualified candidates. Among other opportunities, we offer student internships and a banker trainee program that provides recent graduates with the opportunity to gain insight into several Company departments.
Blocked assets (property and bank deposits) that are associated with such countries and SDNs cannot be paid out, withdrawn, set off, or transferred in any manner without a license from OFAC. Failure to comply with the OFAC Rules can result in serious legal and reputational consequences. 16 In December 2020, the U.S.
Blocked assets (property and bank deposits) that are associated with such countries and SDNs cannot be paid out, withdrawn, set off, or transferred in any manner without a license from OFAC. Failure to comply with the OFAC Rules can result in serious legal and reputational consequences. In December 2020, the U.S.
In addition, our website contains other news and announcements about the Company and its subsidiaries. Our website and the information contained on, or that can be accessed through, our website are not deemed to be incorporated by reference in, and are not considered part of, this Annual Report. Human Capital Our associates are a critical component of our success.
In addition, our website contains other news and announcements about the Company and its subsidiaries. Our website and the information contained on, or that can be accessed through, our website are not deemed to be incorporated by reference in, and are not considered part of, this Annual Report. 7 Human Capital Our associates are a critical component of our success.
We seek to promote from within the Company when feasible and have established programs, such as our “Next Generation Leadership Program,” to help develop future leadership talent. 9 We are committed to maintaining a strong culture that not only engages associates but also serves as a catalyst for growth.
We seek to promote from within the Company when feasible and have established programs, such as our “Next Generation Leadership Program,” to help develop future leadership talent. We are committed to maintaining a strong culture that not only engages associates but also serves as a catalyst for growth.
We acquired approximately $3.1 billion in assets and further strengthened our position in Texas. The systems conversion was completed in April 2022, at which time Spirit Bank merged into Simmons Bank. Merger and Acquisition Strategy Merger and acquisition activities have been an important part of the Company’s growth strategy.
We acquired approximately $3.1 billion in assets and further strengthened our position in Texas. The systems conversion was completed in April 2022, at which time Spirit Bank merged into Simmons Bank. Merger and Acquisition Strategy Merger and acquisition activities have been an important part of the Company’s historical growth strategy.
Additionally, we have instituted a Special Asset Committee for the purpose of reviewing criticized loans in regard to collateral adequacy, workout strategies and proper reserve allocations. 8 Competition There is significant competition among commercial banks in our various market areas.
Additionally, we have instituted a Special Asset Committee for the purpose of reviewing criticized loans in regard to collateral adequacy, workout strategies and proper reserve allocations. Competition There is significant competition among commercial banks in our various market areas.
The Company and its subsidiary bank must hold a capital conservation buffer composed of CET1 capital above its minimum risk-based capital requirements. 12 A banking organization’s qualifying total capital consists of two components: Tier 1 Capital and Tier 2 Capital.
The Company and its subsidiary bank must hold a capital conservation buffer composed of CET1 capital above its minimum risk-based capital requirements. A banking organization’s qualifying total capital consists of two components: Tier 1 Capital and Tier 2 Capital.
Monetary policies of the FRB have in the past had a significant effect on the operating results of bank holding companies and their subsidiary banks, such as the Company and Simmons Bank, and may have similar effects in the future. 18
Monetary policies of the FRB have in the past had a significant effect on the operating results of bank holding companies and their subsidiary banks, such as the Company and Simmons Bank, and may have similar effects in the future.
As of December 31, 2023, the Bank was well capitalized under these regulations. The federal banking agencies are also required by FDICIA to prescribe standards for banks and bank holding companies (including financial holding companies) relating to operations and management, asset quality, earnings, stock valuation and compensation.
As of December 31, 2024, the Bank was well capitalized under these regulations. The federal banking agencies are also required by FDICIA to prescribe standards for banks and bank holding companies (including financial holding companies) relating to operations and management, asset quality, earnings, stock valuation and compensation.
Simmons Bank provides banking and other financial products and services to individuals and businesses using a network of approximately 234 financial centers in Arkansas, Kansas, Missouri, Oklahoma, Tennessee and Texas. Simmons Bank offers commercial banking products and services to business and other corporate customers.
Simmons Bank provides banking and other financial products and services to individuals and businesses using a network of approximately 222 financial centers in Arkansas, Kansas, Missouri, Oklahoma, Tennessee and Texas. Simmons Bank offers commercial banking products and services to business and other corporate customers.
Potential Enforcement Action for Bank Holding Companies and Banks Enforcement proceedings seeking civil or criminal sanctions may be instituted against any bank, any financial or bank holding company, any director, officer, employee or agent of the bank or holding company, which is believed by the federal banking agencies to be violating any administrative pronouncement or engaged in unsafe and unsound practices.
Potential Enforcement Action for Bank Holding Companies and Banks Enforcement proceedings seeking civil or criminal sanctions may be instituted against any bank, any financial or bank holding company, any director, officer, employee or agent of the bank or holding company, which is believed by the federal banking agencies to be violating any applicable banking law, regulation or administrative pronouncement or engaged in unsafe and unsound practices.
During 2020, due to the COVID-19 pandemic, the FRB acting pursuant to the Federal Reserve Act reduced the reserve requirements to zero until further notice. As a result, as of December 31, 2023, the Company’s reserve balances were zero.
During 2020, due to the COVID-19 pandemic, the FRB acting pursuant to the Federal Reserve Act reduced the reserve requirements to zero until further notice. As a result, as of December 31, 2024, the Company’s reserve balances were zero.
For a tabular summary of our risk-weighted capital ratios, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Capital” and Note 23, Stockholders’ Equity, of the Notes to Consolidated Financial Statements.
For a tabular summary of our risk-weighted capital ratios, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Capital” and Note 22, Stockholders’ Equity, of the Notes to Consolidated Financial Statements.
While we continue to consider strategic merger and acquisition opportunities if and as they arise, and while we continue to believe that current market and industry conditions will continue to cause various financial institutions to seek merger partners in the near-to-intermediate future, in the near term, we are also enhancing our focus on ensuring that we capitalize on organic growth opportunities in many of the markets that we have had the fortune to enter through previous mergers and acquisitions.
While we will continue to consider strategic merger and acquisition opportunities if and as they arise, and while we continue to believe that current market and industry conditions will continue to cause various financial institutions to seek merger partners in the near-to-intermediate future, in the near term, we are continuing our enhanced focus on ensuring that we capitalize on organic growth opportunities in many of the markets that we have had the fortune to enter through previous mergers and acquisitions.
In October 2019, we completed the acquisition of The Landrum Company (“Landrum”), headquartered in Columbia, Missouri, including its wholly-owned bank subsidiary, Landmark Bank. We acquired approximately $3.4 billion in assets and further strengthened our position in Missouri, Oklahoma and Texas. The systems conversion was completed in February 2020, at which time Landmark Bank merged into Simmons Bank.
The systems conversion was completed in April 2019, at which time Reliance Bank was merged into Simmons Bank. In October 2019, we completed the acquisition of The Landrum Company (“Landrum”), headquartered in Columbia, Missouri, including its wholly-owned bank subsidiary, Landmark Bank. We acquired approximately $3.4 billion in assets and further strengthened our position in Missouri, Oklahoma and Texas.
As of December 31, 2017, the Company exceeded $15 billion in total assets, and the grandfather provisions applicable to its trust preferred securities no longer apply, and trust preferred securities are no longer included as Tier 1 capital.
As of December 31, 2017, the Company exceeded $15 billion in total assets, and the grandfather provisions applicable to its trust preferred securities no longer apply, and trust preferred securities are no longer included as Tier 1 capital. Trust preferred securities and qualifying subordinated debt are included as total Tier 2 capital.
Since 1990, we have completed 21 whole bank acquisitions, one trust company acquisition, five bank branch acquisitions, one bankruptcy (363) acquisition, four FDIC failed bank acquisitions and four Resolution Trust Corporation failed thrift acquisitions. The following summary provides additional details concerning our more recent acquisition activity.
Since 1990, we have completed 21 whole bank acquisitions, one trust company acquisition, five bank branch acquisitions, one bankruptcy (363) acquisition, four FDIC failed bank acquisitions and four Resolution Trust Corporation failed thrift acquisitions. The following summary provides additional details concerning our more recent acquisition activity. In April 2019, we completed the acquisition of Reliance Bancshares, Inc.
Both of these groups are supported by Simmons Bank’s retail, private banking, trust and various operations divisions. Growth Strategy Over the years, as we have expanded our markets and services, our growth strategy has evolved and diversified. We have used varying acquisition and internal branching methods to enter key growth markets and increase the size of our footprint.
Each of these groups is supported by Simmons Bank’s various operations divisions. Growth Strategy Over the years, as we have expanded our markets and services, our growth strategy has evolved and diversified. We have used varying acquisition and internal branching methods to enter key growth markets and increase the size of our footprint.
Incentive Compensation The Dodd-Frank Act requires the federal banking agencies and the SEC to establish joint regulations or guidelines prohibiting incentive-based payment arrangements at specified regulated entities, including the Company and our subsidiary bank, with at least $1 billion in total consolidated assets that encourage inappropriate risks by providing an executive officer, employee, director, or principal shareholder with excessive compensation, fees, or benefits that could lead to material financial loss to the entity.
At December 31, 2024, Simmons Bank’s total investment in FHLB-Dallas was $56.2 million. 16 Incentive Compensation The Dodd-Frank Act requires the federal banking agencies and the SEC to establish joint regulations or guidelines prohibiting incentive-based payment arrangements at specified regulated entities, including the Company and our subsidiary bank, with at least $1 billion in total consolidated assets that encourage inappropriate risks by providing an executive officer, employee, director, or principal shareholder with excessive compensation, fees, or benefits that could lead to material financial loss to the entity.
Landmark had total assets of $968.8 million, while Triumph provided us with $847.2 million in assets. These combined acquisitions allowed us to expand our existing footprint in Tennessee and to further enhance our scale in two of our key Tennessee growth markets – Memphis and Nashville.
(“Triumph”), including its wholly-owned bank subsidiary, Triumph Bank, headquartered in Memphis, Tennessee. Landmark had total assets of $968.8 million, while Triumph provided us with $847.2 million in assets. These combined acquisitions allowed us to expand our existing footprint in Tennessee and to further enhance our scale in two of our key Tennessee growth markets – Memphis and Nashville.
In addition to amending the Dodd Frank Act, the EGRRCPA also includes certain additional banking-related provisions, consumer protection provisions and securities law-related provisions. Many of the EGRRCPA’s changes were implemented through rules finalized by the federal banking agencies over the course of 2019.
In addition to amending the Dodd Frank Act, the EGRRCPA also includes certain additional banking-related provisions, consumer protection provisions and securities law-related provisions. Many of the EGRRCPA’s changes were implemented through rules finalized by the federal banking agencies over the course of 2019. These rules and their enforcement are subject to the substantial regulatory discretion of the federal banking agencies.
The special assessment was based on estimated uninsured deposits as of December 31, 2022 (excluding the first $5.0 billion) and will be assessed at a quarterly rate of 3.36 basis points, over eight quarterly assessment periods, beginning in the first quarter of 2024.
The special assessment was based on estimated uninsured deposits as of December 31, 2022 (excluding the first $5.0 billion) and will be assessed at a quarterly rate of 3.36 basis points, over eight quarterly assessment periods, beginning in the first quarter of 2024. As a result of this final rule, we accrued $12.4 million related to this assessment.
These rules and their enforcement are subject to the substantial regulatory discretion of the federal banking agencies. 14 Volcker Rule Section 619 of the Dodd-Frank Act, commonly known as the “Volcker Rule,” restricts the ability of banking entities from: (i) engaging in “proprietary trading” and (ii) investing in or sponsoring certain covered funds, subject to certain limited exceptions.
Volcker Rule Section 619 of the Dodd-Frank Act, commonly known as the “Volcker Rule,” restricts the ability of banking entities from: (i) engaging in “proprietary trading” and (ii) investing in or sponsoring certain covered funds, subject to certain limited exceptions.
As of December 31, 2023, Simmons Bank was “well capitalized” based on the aforementioned ratios. 13 Federal Deposit Insurance Corporation Improvement Act The Federal Deposit Insurance Corporation Improvement Act (“FDICIA”), enacted in 1991, requires the FDIC to increase assessment rates for insured banks and authorizes one or more “special assessments,” as necessary for the repayment of funds borrowed by the FDIC or any other necessary purpose.
Federal Deposit Insurance Corporation Improvement Act The Federal Deposit Insurance Corporation Improvement Act (“FDICIA”), enacted in 1991, requires the FDIC to increase assessment rates for insured banks and authorizes one or more “special assessments,” as necessary for the repayment of funds borrowed by the FDIC or any other necessary purpose.
SUPERVISION AND REGULATION The Company The Company, as a bank holding company, is subject to both federal and state regulation. Under federal law, a bank holding company generally must obtain approval from the Board of Governors of the Federal Reserve System (“FRB”) before acquiring ownership or control of the assets or stock of a bank or a bank holding company.
Under federal law, a bank holding company generally must obtain approval from the Board of Governors of the Federal Reserve System (“FRB”) before acquiring ownership or control of the assets or stock of a bank or a bank holding company.
The Company continues to assess the impact of the adopted changes to the CRA regulations. 15 UDAP and UDAAP Federal laws, including Section 5 of the Federal Trade Commission Act, prohibit financial institutions from engaging in unfair or deceptive acts or practices (“UDAP”) in or affecting commerce.
UDAP and UDAAP Federal laws, including Section 5 of the Federal Trade Commission Act, prohibit financial institutions from engaging in unfair or deceptive acts or practices (“UDAP”) in or affecting commerce.
Trust preferred securities and qualifying subordinated debt are included as total Tier 2 capital. 17 The Dodd-Frank Act also previously required banks and bank holding companies with more than $10 billion in assets to adhere to certain enhanced prudential standards, including requirements to conduct annual stress tests, report the results to regulators and publicly disclose such results.
The Dodd-Frank Act also previously required banks and bank holding companies with more than $10 billion in assets to adhere to certain enhanced prudential standards, including requirements to conduct annual stress tests, report the results to regulators and publicly disclose such results.
Pending Legislation Because of concerns relating to, among other things, competitiveness and the safety and soundness of the banking industry, Congress and state legislatures often consider a number of wide-ranging proposals for altering the structure, regulation, and competitive relationships of the nation’s financial institutions and of those chartered in a particular state legislature’s jurisdiction.
The Company is currently evaluating the potential impact of the proposed rules and monitoring developments with respect thereto. 17 Pending Legislation Because of concerns relating to, among other things, competitiveness and the safety and soundness of the banking industry, governmental administrations, as well as Congress and state legislatures, often consider a number of wide-ranging proposals for altering the structure, regulation, and competitive relationships of the nation’s financial institutions and of those chartered in a particular state legislature’s jurisdiction.
A variety of other provisions included in FDICIA may affect the operations of the Company and the subsidiary bank, including reporting requirements, regulatory standards for real estate lending, “truth in savings” provisions, and the requirement that a depository institution give 90 days prior notice to customers and regulatory authorities before closing any branch.
A variety of other provisions included in FDICIA may affect the operations of the Company and the subsidiary bank, including reporting requirements, regulatory standards for real estate lending, “truth in savings” provisions, and the requirement that a depository institution give 90 days prior notice to customers and regulatory authorities before closing any branch. 12 Dodd-Frank Wall Street Reform and Consumer Protection Act Enacted in 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), significantly changed the regulation of financial institutions and the financial services industry.
Among other things, Simmons Bank is required to establish an anti-money laundering (“AML”) program which includes the designation of a BSA officer, the establishment and maintenance of BSA/AML training, the establishment and maintenance of BSA/AML policies and procedures, independent testing of the AML program, and compliance with customer due diligence requirements.
Information sharing among financial institutions for the above purposes is encouraged by an exemption granted to complying financial institutions from the privacy provisions of the GLBA and other privacy laws. 15 Among other things, Simmons Bank is required to establish an anti-money laundering (“AML”) program which includes the designation of a BSA officer, the establishment and maintenance of BSA/AML training, the establishment and maintenance of BSA/AML policies and procedures, independent testing of the AML program, and compliance with customer due diligence requirements.
There are also several exemptions from the definition of covered fund, including, among other things, loan securitizations, joint ventures, certain types of foreign funds, entities issuing asset-backed commercial paper, and registered investment companies. The EGRRCPA and the subsequently promulgated inter-agency agency rules have aimed at simplifying and tailoring certain requirements related to the Volcker Rule.
There are also several exemptions from the definition of covered fund, including, among other things, loan securitizations, joint ventures, certain types of foreign funds, entities issuing asset-backed commercial paper, and registered investment companies.
Brokered Deposits Section 29 of the FDIA and the FDIC regulations promulgated thereunder limit the ability of any bank to accept, renew or roll over any brokered deposit unless it is well capitalized or, with the FDIC’s approval, adequately capitalized.
The EGRRCPA and the subsequently promulgated inter-agency agency rules have aimed at simplifying and tailoring certain requirements related to the Volcker Rule. 13 Brokered Deposits Section 29 of the FDIA and the FDIC regulations promulgated thereunder limit the ability of any bank to accept, renew or roll over any brokered deposit unless it is well capitalized or, with the FDIC’s approval, adequately capitalized.
From time to time, the FRB examines the financial condition of the Company and its subsidiaries. Bank holding companies are not permitted to engage in unsafe and unsound banking practices.
From time to time, the FRB examines the financial condition of the Company and its subsidiaries. For the Company to maintain financial holding company status, each of the Company’s bank subsidiaries must be “well-capitalized” and “well-managed” as defined by the FRB. Bank holding companies are not permitted to engage in unsafe and unsound banking practices.
No bank acquisition may be approved if, after such acquisition, the holding company would control, directly or indirectly, banks having 25% of the total bank deposits in the State of Arkansas, excluding deposits of other banks and public funds. 10 Additionally, under federal and state law, acquisitions of the Company’s common stock above certain thresholds or in connection with certain governance rights or business relationships may be subject to certain regulatory restrictions, including prior notice and approval requirements, and investors in the Company’s common stock are responsible for ensuring that they comply with these restrictions to the extent they are applicable.
Additionally, under federal and state law, acquisitions of the Company’s common stock above certain thresholds or in connection with certain governance rights or business relationships may be subject to certain regulatory restrictions, including prior notice and approval requirements, and investors in the Company’s common stock are responsible for ensuring that they comply with these restrictions to the extent they are applicable.
In connection with the systems conversion, we closed five existing Landmark Bank branches. In October 2021, we completed the acquisition of Landmark Community Bank (“Landmark”), headquartered in Collierville, Tennessee, as well as the acquisition of Triumph Bancshares, Inc. (“Triumph”), including its wholly-owned bank subsidiary, Triumph Bank, headquartered in Memphis, Tennessee.
The systems conversion was completed in February 2020, at which time Landmark Bank merged into Simmons Bank. In connection with the systems conversion, we closed five existing Landmark Bank branches. In October 2021, we completed the acquisition of Landmark Community Bank (“Landmark”), headquartered in Collierville, Tennessee, as well as the acquisition of Triumph Bancshares, Inc.
In particular, subject to certain exceptions, banks, including our subsidiary bank, are prohibited from extending credit, leasing or selling property, furnishing services, or varying prices on the condition that the customer obtain an additional product or service from the bank or its affiliates or not obtain services of a competitor of the bank or its affiliates. 11 Transactions with Affiliates and Insiders Under federal law, transactions between insured depository institutions and their affiliates are governed by Sections 23A and 23B of the Federal Reserve Act and its implementing regulation, Regulation W.
In particular, subject to certain exceptions, banks, including our subsidiary bank, are prohibited from extending credit, leasing or selling property, furnishing services, or varying prices on the condition that the customer obtain an additional product or service from the bank or its affiliates or not obtain services of a competitor of the bank or its affiliates.
The Company is headquartered in Pine Bluff, Arkansas, and had total consolidated assets of $27.3 billion, total consolidated loans of $16.8 billion, total consolidated deposits of $22.2 billion and equity capital of $3.4 billion, each as of December 31, 2023.
The Company is headquartered in Pine Bluff, Arkansas, and had total consolidated assets of $26.88 billion, total consolidated loans of $17.01 billion, total consolidated deposits of $21.89 billion and equity capital of $3.53 billion, each as of December 31, 2024.
As of December 31, 2023, the Company and its subsidiaries had approximately 3,007 full time equivalent associates. None of our associates are represented by any union or similar groups, and we have not experienced any labor disputes or strikes arising from any such organized labor groups.
None of our associates are represented by any union or similar groups, and we have not experienced any labor disputes or strikes arising from any such organized labor groups.
Under the foregoing dividend restrictions, and while maintaining its “well capitalized” status, at December 31, 2023, Simmons Bank had approximately $54.4 million available for payment of dividends to the Company, without prior regulatory approval.
Under the foregoing dividend restrictions, and while maintaining its “well capitalized” status, at December 31, 2024, Simmons Bank had paid to the Company all available dividends.
However, a bank holding company’s repurchases of shares of its common stock may, in certain circumstances, be subject to approval or notice requirements under other regulations, policies, or supervisory expectations of the bank holding company’s regulators, may be discouraged by regulators in the form of supervisory feedback on the bank holding company’s regulatory capital levels or plan, and must comply with all applicable state and federal corporate and securities laws and regulations.
While past dividends are not necessarily indicative of amounts that may be paid or available to be paid in future periods, net profits of Simmons Bank and cash balances at the Company are projected to be sufficient to pay quarterly dividends on the Company’s common stock at current levels and interest and principal on the Company’s debt as well as meet other liquidity needs. 9 A bank holding company’s repurchases of shares of its common stock or redemption of its debt securities may, in certain circumstances, be subject to approval or notice requirements under other regulations, policies, or supervisory expectations of the bank holding company’s regulators, may be discouraged by regulators in the form of supervisory feedback on the bank holding company’s regulatory capital levels or plan, and must comply with all applicable state and federal corporate and securities laws and regulations.
Because Simmons Bank’s assets exceed $10 billion, its deposit insurance assessment is based on a scoring system that examines the institution’s supervisory ratings and certain financial measures. The scoring system assesses risk measures to produce two scores, a performance score and a loss severity score, that are combined and converted to an initial assessment rate.
Simmons Bank is required to pay deposit insurance assessments to maintain the DIF. Because Simmons Bank’s assets exceed $10 billion, its deposit insurance assessment is based on a scoring system that examines the institution’s supervisory ratings and certain financial measures.
In August 2020, the FRB, along with the other federal bank regulatory agencies, adopted a final rule that allows the Company and the Bank to phase-in the impact of adopting the Current Expected Credit Losses (or “CECL”) methodology up to two years, with a three-year period to phase out the cumulative benefit to regulatory capital provided during the two-year delay.
Accordingly, under the fully-phased in Basel III Capital Rules, the capital standards applicable to the Company include an additional capital conservation buffer of 2.5% of CET1, effectively resulting in minimum ratios inclusive of the capital conservation buffer of (1) CET1 to risk-weighted assets of at least 7.0%, (2) Tier 1 capital to risk-weighted assets of at least 8.5%, and (3) Total capital to risk-weighted assets of at least 10.5%. 11 In August 2020, the FRB, along with the other federal bank regulatory agencies, adopted a final rule that allows the Company and the Bank to phase-in the impact of adopting the Current Expected Credit Losses (or “CECL”) methodology up to two years, with a three-year period to phase out the cumulative benefit to regulatory capital provided during the two-year delay.
To both effectively compete for and service the needs of different types of customers, Simmons Bank now operates using two main groups, a community banking group (which generally focuses on small-to-mid-size customer relationships) and a commercial banking group (which generally focuses on larger, more complex customers with intricate or unique banking needs).
Additionally, Simmons First Insurance Services, Inc. and Simmons First Insurance Services of TN, LLC are wholly-owned subsidiaries of Simmons Bank and are insurance agencies that offer various lines of personal and corporate insurance coverage to individual and commercial customers. 5 Community Banking, Commercial Banking and Wealth Strategy To both effectively compete for and service the needs of different types of customers, Simmons Bank now operates using three main groups: a community banking group (which generally focuses on retail, small-to-mid-size customer relationships plus mortgage lending), a commercial banking group (which generally focuses on larger, more complex customers with intricate or unique banking needs) and a wealth group (which generally focuses on serving investment and trust needs of consumers and businesses).
FDIC Deposit Insurance and Assessments Our customer deposit accounts are insured up to applicable limits by the FDIC’s Deposit Insurance Fund (“DIF”) up to $250,000 per separately insured depositor. Simmons Bank is required to pay deposit insurance assessments to maintain the DIF.
The Company continues to monitor the status of those proposed rules and FDIC action and statements with respect thereto. FDIC Deposit Insurance and Assessments Our customer deposit accounts are insured up to applicable limits by the FDIC’s Deposit Insurance Fund (“DIF”) up to $250,000 per separately insured depositor.
We are also committed to promoting our associates’ well-being. Our wellness program, “Ultimate You,” assists associates in improving their level of physical, financial, and mental fitness through offerings such as discounted gym memberships, financial literacy training, channels for counseling, and health-focused challenges and contests.
Our wellness program, “Ultimate You,” assists associates in improving their level of physical, financial, and mental fitness through offerings such as financial literacy training, channels for counseling and health-focused challenges and contests. As of December 31, 2024, the Company and its subsidiaries had approximately 2,946 full time equivalent associates.
We acquired approximately $1.5 billion in assets and added 22 branches to the Simmons Bank footprint, substantially enhancing our retail presence within the St. Louis market area. The systems conversion was completed in April 2019, at which time Reliance Bank was merged into Simmons Bank.
(“Reliance”), headquartered in Des Peres, Missouri (part of the greater St. Louis metropolitan area), including its wholly-owned bank subsidiary, Reliance Bank. We acquired approximately $1.5 billion in assets and added 22 branches to the Simmons Bank footprint, substantially enhancing our retail presence within the St. Louis market area.
The FDIC has the ability to make discretionary adjustments to the total score based upon significant risk factors not adequately captured in the calculations.
The scoring system assesses risk measures to produce two scores, a performance score and a loss severity score, that are combined and converted to an initial assessment rate. The FDIC has the ability to make discretionary adjustments to the total score based upon significant risk factors not adequately captured in the calculations.
We cannot predict whether or in what form any proposals will be adopted or the extent to which our business may be affected. Effect of Governmental Monetary Policies The FRB uses monetary policy tools to impact interest rates, credit market conditions and money market conditions, as well as to influence general economic conditions, including employment, market interest and inflation rates.
This and other events make future regulations increasingly uncertain. Effect of Governmental Monetary Policies The FRB uses monetary policy tools to impact interest rates, credit market conditions and money market conditions, as well as to influence general economic conditions, including employment, market interest and inflation rates.
Through our “Better Bank” initiative, we have also focused on evaluating and, where appropriate, enhancing our people, processes and systems so that we are able to more effectively and efficiently compete as an organization of the size and scale that we now have achieved. 7 To the extent that a strategic merger and acquisition opportunity becomes of interest, we believe our community banking philosophy, access to capital and successful merger and acquisition history would position us as a purchaser of choice for a community and regional bank seeking a strong partner.
We also continue to focus on evaluating and, where appropriate, enhancing our people, processes and systems so that we are able to more effectively and efficiently compete as an organization of the size and scale that we now have achieved.
In October 2023, the federal prudential regulatory agencies adopted substantial revisions to the regulations implementing the CRA.
In October 2023, the federal prudential regulatory agencies adopted substantial revisions to the regulations implementing the CRA. The legality of these CRA regulations is being challenged and a preliminary injunction against enforcing new rules implementing the modified CRA regulations has been granted.
The business, legal, operational, organizational, accounting, and tax issues all must be addressed if the merger or acquisition is to be successful. Throughout the process, valuation is an important aspect of the decision-making process, from initial target analysis through integration of the entities.
The process of merging or acquiring banking organizations is extremely complex; it requires a great deal of time and effort from both buyer and seller. The business, legal, operational, organizational, accounting and tax issues all must be addressed if the merger or acquisition is to be successful.
As consolidations continue to unfold in the banking industry, the management of risk is an important consideration in how the Company evaluates and consummates these transactions. The senior management teams of both the Company and Simmons Bank have extensive experience in acquiring banks, branches and deposits and post-acquisition integration of operations.
The senior management teams of both the Company and Simmons Bank have extensive experience in acquiring banks, branches and deposits and post-acquisition integration of operations. We believe this experience positions us to successfully acquire and integrate banks to the extent a compelling strategic opportunity presents itself.
Removed
Additionally, Simmons First Insurance Services, Inc. and Simmons First Insurance Services of TN, LLC are wholly-owned subsidiaries of Simmons Bank and are insurance agencies that offer various lines of personal and corporate insurance coverage to individual and commercial customers. 5 Community and Commercial Banking Strategy Historically, the Company utilized separately chartered community bank subsidiaries to provide full-service banking products and services across our footprint.
Added
To the extent that a strategic merger and acquisition opportunity becomes of interest, we believe our community banking philosophy, access to capital and successful merger and acquisition history would position us as a purchaser of choice for a community and regional bank seeking a strong partner. 6 As consolidations continue to unfold in the banking industry, the management of risk is an important consideration in how the Company evaluates and consummates these transactions.
Removed
During 2014, we consolidated all separately chartered banks into Simmons Bank in order to more effectively meet the increased regulatory burden facing banks, reduce certain operating costs, and more efficiently perform operational duties.
Added
We have implemented extensive training and programming to support leaders and associates to emphasize and reinforce our culture cornerstones and ensure a pervasive, shared value system. Finally, we are also committed to promoting our associates’ well-being.
Removed
In 2013, we completed the acquisition of Metropolitan National Bank (“Metropolitan” or “MNB”) from Rogers Bancshares, Inc. (“RBI”). The purchase was completed through an auction of the MNB stock by the U. S. Bankruptcy Court as a part of the Chapter 11 proceeding of RBI.
Added
SUPERVISION AND REGULATION The Company and its subsidiaries are extensively regulated under both federal and state laws. The following description summarizes certain aspects of that regulation that are material to the Company and its subsidiary bank, Simmons Bank, and is not a complete description of all applicable laws or regulations, or all aspects of those regulations, that affect us.
Removed
MNB, which was headquartered in Little Rock, Arkansas, served central and northwest Arkansas and had total assets of $950 million. Upon completion of the acquisition, MNB and our Rogers, Arkansas chartered bank, Simmons First Bank of Northwest Arkansas were merged into Simmons Bank. As an in-market acquisition, MNB had significant branch overlap with our existing branch footprint.
Added
To the extent that any specific statutory or regulatory provision or proposal is described in this Annual Report on Form 10-K, such description is qualified in its entirety by reference to the statutory or regulatory provision or proposal. Proposals to change the laws, regulations, and policies governing the banking industry are frequently raised at both the state and federal levels.
Removed
We completed the systems conversion for MNB on March 21, 2014, and simultaneously closed 27 branch locations that had overlapping footprints with other locations. On August 31, 2014, we completed the acquisition of Delta Trust & Banking Corporation (“Delta Trust”), including its wholly-owned bank subsidiary, Delta Trust & Bank.
Added
These laws and regulations, and changes thereto, impose compliance costs and create obligations and, in some cases, reporting obligations, and compliance with these laws, regulations, and obligations may require us to use significant resources.
Removed
Also headquartered in Little Rock, Arkansas, Delta Trust had total assets of $420 million. The acquisition further expanded Simmons Bank's presence in south, central and northwest Arkansas and allowed us the opportunity to provide services that had not previously been offered with the addition of Delta Trust's insurance agency and securities brokerage service.
Added
The likelihood and timing of any changes in laws and regulations and the supervisory environment, and the impact such changes may have on us, are difficult to predict and assess. 8 The Company The Company, as a bank holding company, is subject to both federal and state regulation.
Removed
We merged Delta Trust & Bank into Simmons Bank and completed the systems conversion on October 24, 2014. At that time, we also closed 4 branch locations with overlapping footprints. In February 2015, we completed the acquisition of Liberty Bancshares, Inc. (“Liberty”), including its wholly-owned bank subsidiary, Liberty Bank.
Added
No bank acquisition may be approved if, after such acquisition, the holding company would control, directly or indirectly, banks having 25% of the total bank deposits in the State of Arkansas, excluding deposits of other banks and public funds.
Removed
Liberty was headquartered in Springfield, Missouri, served southwest Missouri and had total assets of $1.1 billion. The acquisition enhanced Simmons Bank’s presence not only in southwest Missouri, but also in the St. Louis and Kansas City metropolitan areas.
Added
Transactions with Affiliates and Insiders Under federal law, transactions between insured depository institutions and their affiliates are governed by Sections 23A and 23B of the Federal Reserve Act and its implementing regulation, Regulation W.
Removed
The acquisition also allowed us the opportunity to provide services that we had not previously offered in these areas such as trust and securities brokerage services. In addition, Liberty’s expertise in SBA lending enhanced our commercial offerings throughout our geographies. We merged Liberty Bank into Simmons Bank and completed the systems conversion in April 2015.
Added
As of December 31, 2024, Simmons Bank was “well capitalized” based on the aforementioned ratios.
Removed
Also in February 2015, we completed the acquisition of Community First Bancshares, Inc. (“Community First”), including its wholly-owned bank subsidiary, First State Bank. Community First was headquartered in Union City, Tennessee, served customers throughout Tennessee, and had total assets of $1.9 billion.
Added
In July 2024, the FDIC proposed significant revisions to the brokered deposit regulations, including significant expansions to the definition of “deposit broker,” and significantly narrowing the primary purpose exception to “deposit broker” status. The comment period on those proposed rules has closed.
Removed
The acquisition expanded our footprint into Tennessee and allowed us the opportunity to provide additional services to customers in this area and expand our community banking strategy. In addition, Community First’s expertise in SBA and consumer lending benefited our customers across each region. We merged First State Bank into Simmons Bank and completed the systems conversion in September 2015.
Added
In January 2025, the Acting Chairman of the FDIC issued a statement indicating that the FDIC may focus on withdrawing those proposed rules during 2025.
Removed
In October 2015, we completed the acquisition of Ozark Trust & Investment Corporation (“Ozark Trust”), including its wholly-owned non-deposit trust company, Trust Company of the Ozarks.
Added
These proposed rules may also be subject to the presidential memorandum entitled “Regulatory Freeze Pending Review,” which directs federal agencies to (1) not propose or issue any rules until they are reviewed and approved by a department or agency head appointed by the President, (2) immediately withdraw any unpublished rules to allow for the review by a department or agency head as described above, and (3) consider postponing for 60 days from the date of the executive order the effective date for any rules that have been published in the Federal Register, or any rules that have been issued but have not taken effect, to allow for review of any questions of fact, law, or policy.
Removed
Headquartered in Springfield, Missouri, Ozark Trust had over $1 billion in assets under management and provided a wide range of financial services for its clients including investment management, trust services, IRA rollover or transfers, successor trustee services and personal representative and custodial services.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

38 edited+24 added−8 removed160 unchanged
Biggest changeWeaknesses in the credit quality of the issuers of the securities within our portfolio or in the strength of the collateral, if any, underlying those securities could also result in a decline in the value of our investment securities portfolio, which could negatively affect equity and potentially impact our earnings or the liquidity that we could generate from our investment securities portfolio. 19 A lack of liquidity could impair our ability to fund our business and thereby adversely affect our financial condition and results of operations.
Biggest changeIf the Company were required to sell such securities, including to meet liquidity needs, the Company would realize any previously unrealized losses which could adversely impact the Company’s financial condition and results of operations. A lack of liquidity could impair our ability to fund our business and thereby adversely affect our financial condition and results of operations.
If the Federal Reserve further raises interest rates, we may not be able to reflect increasing interest rates in rates charged on loans or paid on deposits due to competitive pressures, which would negatively impact our mix of deposits and other funding sources, reduce demand for our products and services, or otherwise negatively impact our financial condition and results of operations.
If the Federal Reserve raises interest rates, we may not be able to reflect increasing interest rates in rates charged on loans or paid on deposits due to competitive pressures, which would negatively impact our mix of deposits and other funding sources, reduce demand for our products and services, or otherwise negatively impact our financial condition and results of operations.
Increasing unemployment and diminished asset values may prevent our credit card customers from repaying their credit card balances which could result in an increased amount of our net charge-offs that could have a material adverse effect on our unsecured credit card portfolio. 20 We may not maintain an appropriate allowance for credit losses.
Increasing unemployment and diminished asset values may prevent our credit card customers from repaying their credit card balances which could result in an increased amount of our net charge-offs that could have a material adverse effect on our unsecured credit card portfolio. We may not maintain an appropriate allowance for credit losses.
However, the impact at adoption was influenced by our portfolios' composition and quality at the adoption date and economic conditions and forecasts at that time. 27 In addition, our management must exercise judgment in appropriately applying many of our accounting policies and methods so they comply with generally accepted accounting principles.
However, the impact at adoption was influenced by our portfolios' composition and quality at the adoption date and economic conditions and forecasts at that time. In addition, our management must exercise judgment in appropriately applying many of our accounting policies and methods so they comply with generally accepted accounting principles.
If we were to become subject to significant environmental liabilities, it could have a material adverse effect on our results of operations and financial condition. We may be subject to allegations of intellectual property infringement or may fail to effectively protect our own intellectual property rights.
If we were to become subject to significant environmental liabilities, it could have a material adverse effect on our results of operations and financial condition. 29 We may be subject to allegations of intellectual property infringement or may fail to effectively protect our own intellectual property rights.
The transition from LIBOR has resulted in and could continue to result in added costs and employee efforts and could present additional risk. Since alternative reference rates are calculated differently than LIBOR, payments under contracts referencing new alternative reference rates will differ from those referencing LIBOR.
The transition from LIBOR has resulted in and could continue to result in added costs and employee efforts and could present additional risk. 19 Since alternative reference rates are calculated differently than LIBOR, payments under contracts referencing new alternative reference rates will differ from those referencing LIBOR.
If we are unable to continue to sell conforming loans to the agencies, our ability to fund, and thus originate, additional mortgage loans may be adversely affected, which would adversely affect our results of operations. Sales of our loans are subject to a variety of risks.
If we are unable to continue to sell conforming loans to the agencies, our ability to fund, and thus originate, additional mortgage loans may be adversely affected, which would adversely affect our results of operations. 20 Sales of our loans are subject to a variety of risks.
Investments in shares of the Company’s common stock or other securities, therefore, are subject to investment risk, including the possible loss of principal. Anti-takeover provisions could negatively impact our shareholders.
Investments in shares of the Company’s common stock or other securities, therefore, are subject to investment risk, including the possible loss of principal. 30 Anti-takeover provisions could negatively impact our shareholders.
While it appears these steps by the banking regulators helped customers’ perception of the financial markets and financial services industry generally, a number of factors, including further bank closures, or deposit outflows (and particularly sudden deposit outflows) from banks, may drive additional deposit outflows, increased borrowing and funding costs, and increased competition for liquidity, any of which could have a material adverse impact on our financial performance or financial condition.
While these steps by the banking regulators helped customers’ perception of the financial markets and financial services industry generally, a number of factors, including further bank closures, or deposit outflows (and particularly sudden deposit outflows) from banks, may drive additional deposit outflows, increased borrowing and funding costs, and increased competition for liquidity, any of which could have a material adverse impact on our financial performance or financial condition.
To assist with the management of our credit, liquidity, operations, and compliance functions and risks, we have developed, and currently use, various models and other analytical tools, including certain estimations. The models and estimations often take into account assumptions and historical trends and are, in some case, based on subjective judgments.
To assist with the management of our credit, liquidity, operations, and compliance functions and risks, we have developed, and currently use, various models and other analytical tools, including certain estimations. The models and estimations often take into account assumptions and historical trends and are, in some cases, based on subjective judgments.
Our business is heavily reliant on information technology systems, facilities, and processes; and a disruption in those systems, facilities, and processes, or a breach, including cyber-attacks, in the security of our systems, could have significant, negative impact on our business, result in the disclosure of confidential information, and create significant financial and legal exposure for us.
Our business is heavily reliant on information technology systems, facilities, and processes; and a disruption in those systems, facilities, and processes, or a breach, including cyber-attacks, in the security of our systems, could have significant, negative impacts on our business, result in the disclosure of confidential information, and create significant financial and legal exposure for us.
Our ability to pay dividends depends on the following factors, among others: • We may not have sufficient earnings since our primary source of income, the payment of dividends to us by our subsidiary bank, is subject to federal and state laws that limit the ability of the bank to pay dividends; • FRB policy requires bank holding companies to pay cash dividends on common stock only out of net income available over the past year and only if prospective earnings retention is consistent with the organization’s expected future needs and financial condition; and • Our Board of Directors may determine that, even though funds are available for dividend payments, retaining the funds for internal uses, such as expansion of our operations, is a better strategy.
Our ability to pay dividends depends on the following factors, among others: • We may not have sufficient earnings since our primary source of income, the payment of dividends to us by our subsidiary bank, is subject to federal and state laws that limit the ability of the bank to pay dividends, and recently we have had to apply for state regulatory approval for certain dividends paid by the Bank to the Company; • FRB policy requires bank holding companies to pay cash dividends on common stock only out of net income available over the past year and only if prospective earnings retention is consistent with the organization’s expected future needs and financial condition; and • Our Board of Directors may determine that, even though funds are available for dividend payments, retaining the funds for internal uses, such as expansion of our operations, is a better strategy.
Moreover, without notice to or consent from the holders of our common stock, we may issue additional series of subordinated debt securities in the future with terms similar to those of our existing subordinated debt securities or enter into other financing agreements that limit our ability to purchase or to pay dividends or distributions on our capital stock. 29 We may be unable to, or choose not to, pay dividends on our common stock.
Moreover, without notice to or consent from the holders of our common stock, we may issue additional series of subordinated debt securities in the future with terms similar to those of our existing subordinated debt securities or enter into other financing agreements that limit our ability to purchase or to pay dividends or distributions on our capital stock.
While we continue to experience a better performance with respect to net charge-offs than the national average in our credit card portfolio, our net charge-offs were 2.20% and 1.49% of our average outstanding credit card balances for the years ended December 31, 2023 and 2022, respectively.
While we continue to experience a better performance with respect to net charge-offs than the national average in our credit card portfolio, our net charge-offs were 2.93% and 2.20% of our average outstanding credit card balances for the years ended December 31, 2024 and 2023, respectively.
Risks Related to the Company’s Securities The holders of our subordinated notes and subordinated debentures have rights that are senior to those of our common shareholders.
Risks Related to the Company’s Securities The holders of our subordinated notes have rights that are senior to those of our common shareholders. We have issued subordinated notes.
Despite our efforts and those of our third party service providers to ensure the integrity of our systems, it is possible that we may not be able to anticipate or to implement effective preventive measures against all security breaches of these types, especially because the techniques used change frequently or are not recognized until launched, and because security attacks can originate from a wide variety of sources, including persons who are involved with organized crime or associated with external service providers or who may be linked to terrorist organizations or hostile foreign governments.
These “denial-of-service” attacks have not breached our data security systems, but require substantial resources to defend, and may affect customer satisfaction and behavior. 26 Despite our efforts and those of our third party service providers to ensure the integrity of our systems, it is possible that we may not be able to anticipate or to implement effective preventive measures against all security breaches of these types, especially because the techniques used change frequently or are not recognized until launched, and because security attacks can originate from a wide variety of sources, including persons who are involved with organized crime or associated with external service providers or who may be linked to terrorist organizations or hostile foreign governments.
We, therefore, may not be able to fully recover the outstanding balance of a loan in the event of its default if the real estate serving as collateral has declined in value from its original estimate, which could have a material adverse impact on our business, financial condition or results of operations.
We, therefore, may not be able to fully recover the outstanding balance of a loan in the event of its default if the real estate serving as collateral has declined in value from its original estimate, which could have a material adverse impact on our business, financial condition or results of operations. 21 Nonperforming assets take significant time to resolve and may adversely affect our business, results of operations and financial condition.
Recent events in the financial services industry (including the 2023 closures of Silicon Valley Bank, Signature Bank and First Republic Bank) caused general uncertainty and concern regarding the adequacy of liquidity of the financial services industry generally.
Prior events in the financial services industry, such as the 2023 closures of Silicon Valley Bank, Signature Bank and First Republic Bank, have caused general uncertainty and concern regarding the adequacy of liquidity of the financial services industry generally.
In addition, in the event of our bankruptcy, dissolution or liquidation, the holders of both the subordinated debentures and the subordinated notes must be satisfied before any distributions can be made to the holders of our common stock.
Among other things, in the event of our bankruptcy, dissolution or liquidation, the holders of the subordinated notes must be satisfied before any distributions can be made to the holders of our common stock.
If our security systems were penetrated or circumvented, it could cause serious negative consequences for us, including significant disruption of our operations, misappropriation of our confidential information or that of our customers, or damage our computers or systems and those of our customers and counterparties, and could result in violations of applicable privacy and other laws, financial loss to us or to our customers, loss of confidence in our security measures, customer dissatisfaction, significant litigation exposure, and harm to our reputation, all of which could have a material adverse effect on us. 26 We depend on qualified employees and key personnel to operate and lead our business, and we may not be able to attract or retain them in the future.
If our security systems were penetrated or circumvented, it could cause serious negative consequences for us, including significant disruption of our operations, misappropriation of our confidential information or that of our customers, or damage our computers or systems and those of our customers and counterparties, and could result in violations of applicable privacy and other laws, financial loss to us or to our customers, loss of confidence in our security measures, customer dissatisfaction, significant litigation exposure, and harm to our reputation, all of which could have a material adverse effect on us.
As of December 31, 2023, we had $1.3 billion of goodwill and $112.6 million of other intangible assets.
As of December 31, 2024, we had $1.3 billion of goodwill and $97.2 million of other intangible assets.
Federal and state regulatory authorities require us and our subsidiary bank to maintain adequate levels of capital to support our operations. Many circumstances could require us to seek additional capital, such as: • faster than anticipated growth; • reduced earning levels; • operating losses; • changes in economic conditions; • revisions in regulatory requirements; or • additional acquisition opportunities.
Many circumstances could require us to seek additional capital, such as: • faster than anticipated growth; • reduced earning levels; • operating losses; • changes in economic conditions; • revisions in regulatory requirements; or • additional acquisition opportunities.
Errors or mistakes in these activities (including human error and systems error), as well as other failures to mitigate operational risks, can have adverse consequences, including exposing us to liability and loss and, in the case of providing services to our customers, preventing us from receiving certain contractual protections.
Errors or mistakes in these activities (including human error and systems error), as well as other failures to mitigate operational risks, can have adverse consequences, including exposing us to liability and loss and, in the case of providing services to our customers, preventing us from receiving certain contractual protections. 27 Accounting standards periodically change, and the application of our accounting policies and methods may require management to make estimates about matters that are uncertain.
These laws, regulations, and changes can increase our costs of regulatory compliance. They also can significantly affect the markets in which we do business, the markets for and value of our investments, and our ongoing operations, costs, and profitability.
These laws, regulations, and changes thereto can increase our costs of regulatory compliance, make our business more complicated or burdensome to conduct, and have other adverse impacts on our business generally. They also can significantly affect the markets in which we do business, the markets for and value of our investments, and our ongoing operations, costs, and profitability.
Certain financial institutions in the United States have also experienced attacks from technically sophisticated and well-resourced third parties that were intended to disrupt normal business activities by making internet banking systems inaccessible to customers for extended periods. These “denial-of-service” attacks have not breached our data security systems, but require substantial resources to defend, and may affect customer satisfaction and behavior.
Certain financial institutions in the United States have also experienced attacks from technically sophisticated and well-resourced third parties that were intended to disrupt normal business activities by making internet banking systems inaccessible to customers for extended periods.
As a result, we are unable to predict the ultimate impact of future legislation or regulation, including the extent to which it could increase costs or limit our ability to pursue business opportunities in an efficient manner, or otherwise adversely affect our business, financial condition and results of operations.
As a result, we are unable to predict the ultimate impact of future legislation or regulation, including the extent to which it could increase costs or limit our ability to pursue business opportunities in an efficient manner, or otherwise adversely affect our business, financial condition and results of operations. 28 Our failure to comply with applicable banking laws and regulations could result in significant monetary penalties and losses, restrict our ability to execute our growth strategy, and have other material adverse impacts on our business.
However, these appraisals are only estimates of value, and mistakes of fact or judgement on the part of the appraiser could adversely affect the reliability of their appraisals.
In making certain of these loans, we rely on estimates concerning the value of the real estate provided by independent appraisers. However, these appraisals are only estimates of value, and mistakes of fact or judgement on the part of the appraiser could adversely affect the reliability of their appraisals.
If our methodology is flawed, or if we experience changes in market or economic conditions, or in conditions of our borrowers, the allowance may become inadequate, which would result in additional provisions to increase the allowance to an appropriate level. This could negatively impact our business, including through a material decrease in our earnings.
Some assumptions require management to forecast how borrowers will perform in changing and unprecedented economic conditions. If our methodology is flawed, or if we experience changes in market or economic conditions, or in conditions of our borrowers, the allowance may become inadequate, which would result in additional provisions to increase the allowance to an appropriate level.
As such, the models and estimations may not be effective in identifying and managing risks, which could adversely impact our financial condition and results of operations.
As such, the models and estimations may not be effective in identifying and managing risks, which could adversely impact our financial condition and results of operations. Inadequate models may also result in compliance failures, which could lead to increased scrutiny by our regulators. 25 Our risk-management framework may not be effective in mitigating risks and/or losses.
The combination of these provisions effectively inhibits a non-negotiated merger or other business combination, which, in turn, could adversely affect the market price of our common stock.
The combination of these provisions effectively inhibits a non-negotiated merger or other business combination, which, in turn, could adversely affect the market price of our common stock. These provisions could also discourage proxy contests and make it more difficult for holders of our common stock to elect directors other than the candidates nominated by our Board of Directors.
During 2022 and 2023, in response to rising market interest rates, our cost of funds increased due to customer migration from lower-cost to higher-cost deposit accounts, including interest-bearing transaction accounts and time deposits, which negatively impacted our cost of funds and net interest margin.
Also, changes in our deposit mix and growth could adversely affect our profitability and the ability to expand our loan portfolio, as well as our liquidity and funding mix. 18 During 2024 and previous recent years, in response to rising market interest rates, our cost of funds has increased due to customer migration from lower-cost to higher-cost deposit accounts, including interest-bearing transaction accounts and time deposits, which has negatively impacted our cost of funds and net interest margin.
For these reasons and others, these types of loans present heightened lending risks that, if realized, may materially and adversely affect our business, financial condition or results of operations. 21 In the event we are required to foreclose on a loan secured by real estate, we may not be able to realize the value of that real estate as indicated in any independent appraisals upon which we relied in extending the loan.
In the event we are required to foreclose on a loan secured by real estate, we may not be able to realize the value of that real estate as indicated in any independent appraisals upon which we relied in extending the loan. Loans secured by real estate make up a substantial portion of our loan portfolio.
Substantial legal liability, which may not be insured, and significant regulatory actions against us could materially and adversely impact our business operations, including our ability to engage in mergers and acquisitions, our results of operations and our financial condition. 28 The Federal Reserve Board’s source of strength doctrine could require that we divert capital to our subsidiary bank instead of applying available capital towards planned uses, such as engaging in acquisitions or paying dividends to shareholders.
The Federal Reserve Board’s source of strength doctrine could require that we divert capital to our subsidiary bank instead of applying available capital towards planned uses, such as engaging in acquisitions or paying dividends to shareholders.
We cannot assure you of our ability to continue to pay dividends.
We may be unable to, or choose not to, pay dividends on our common stock. We cannot assure you of our ability to continue to pay dividends.
We have a sizeable consumer credit card portfolio. Although we experienced a decreased amount of net charge-offs in our credit card portfolio in recent years, the amount of net charge-offs could worsen.
We have a sizeable consumer credit card portfolio, and, among other things, the amount of net charge-offs associated with it could worsen.
Our investment securities portfolio could decline in value as a result of interest rate changes and changes in issuer credit quality or the strength of the associated collateral. If interest rates change in the future, the market value of our investment securities portfolio may decline.
Our investment securities portfolio could decline in value and we may incur losses as a result of interest rate changes and changes in issuer credit quality or the strength of the associated collateral. As of December 31, 2024, we owned $6.17 billion of investment securities, which included $3.64 billion in held-to-maturity securities and $2.53 billion in available for sale securities.
Inadequate models may also result in compliance failures, which could lead to increased scrutiny by our regulators. 25 We may not be able to raise the additional capital we need to grow and, as a result, our ability to expand our operations could be materially impaired.
We may not be able to raise the additional capital we need to grow and, as a result, our ability to expand our operations could be materially impaired. Federal and state regulatory authorities require us and our subsidiary bank to maintain adequate levels of capital to support our operations.
These provisions could also discourage proxy contests and make it more difficult for holders of our common stock to elect directors other than the candidates nominated by our Board of Directors. 30 General Risk Factors Our management has broad discretion over the use of proceeds from future stock offerings.
General Risk Factors Our management has broad discretion over the use of proceeds from future stock offerings.
Removed
Also, changes in our deposit mix and growth could adversely affect our profitability and the ability to expand our loan portfolio, as well as our liquidity and funding mix.
Added
Decreases in interest rates may increase prepayment speeds of certain assets, which may adversely impact our net interest income.
Removed
Loans secured by real estate make up a substantial portion of our loan portfolio. In making certain of these loans, we rely on estimates concerning the value of the real estate provided by independent appraisers.
Added
The fair value of our investment securities may be adversely affected by market conditions, including changes in interest rates, and the occurrence of any events adversely affecting the issuer of particular securities in our investments portfolio, including changes in the issuer’s credit quality.
Removed
Accounting standards periodically change, and the application of our accounting policies and methods may require management to make estimates about matters that are uncertain.
Added
For available-for-sale securities, the unrealized gains and losses are recorded in equity, net of tax, in accumulated other comprehensive income (“AOCI”).
Removed
Our failure to comply with applicable banking laws and regulations could result in significant monetary penalties and losses, restrict our ability to execute our growth strategy, and have other material adverse impacts on our business.
Added
On a quarterly basis, we analyze whether there has been a decline in fair value below the amortized cost basis of our available for sale investment securities to determine whether there is a credit loss associated with the decline in fair value.
Removed
If we defer payments of interest on our outstanding subordinated debentures or if certain defaults relating to those debentures occur, we will be prohibited from declaring or paying dividends or distributions on, and from making liquidation payments with respect to, our common stock. We have subordinated debentures issued in connection with trust preferred securities.
Added
We consider the nature of the collateral, potential future changes in collateral values, default rates, delinquency rates, third-party guarantees, credit ratings, interest rate changes since purchase, volatility of the security’s fair value and historical loss information for financial assets secured with similar collateral among other factors.
Removed
Payments of the principal and interest on the trust preferred securities are unconditionally guaranteed by us. The subordinated debentures are senior to our shares of common stock. As a result, we must make payments on the subordinated debentures (and the related trust preferred securities) before any dividends can be paid on our common stock.
Added
We use a systematic methodology to determine the allowance for credit losses (“ACL”) for investment securities held to maturity. The ACL is a valuation account that is deducted from the amortized cost basis to present the net amount expected to be collected on the held-to-maturity portfolio.
Removed
We have the right to defer distributions on the subordinated debentures (and the related trust preferred securities) for up to five years, during which time no dividends may be paid to holders of our capital stock.
Added
We consider the effects of past events, current conditions, and reasonable and supportable forecasts on the collectability of the investment portfolio. Our estimate of the ACL involves a high degree of judgment; therefore, our process for determining expected credit losses may result in a range of expected credit losses.
Removed
If we elect to defer or if we default with respect to our obligations to make payments on these subordinated debentures, this would likely have a material adverse effect on the market value of our common stock.
Added
We monitor the held-to-maturity portfolio on a quarterly basis to determine whether a valuation account needs to be recorded. Because of changing economic and market conditions affecting issuers, we may be required to recognize expected credit losses on securities in future periods, which could have a material adverse effect on our business, financial condition or results of operations.
Added
As a result of fluctuations in interest rates, the market value of previously issued debt securities in the held-to-maturity portion of our securities portfolio has declined significantly, resulting in unrealized losses.
Added
This could negatively impact our business, including through a material decrease in our earnings.
Added
If we fail to accurately identify the appropriate economic indicators, to accurately estimate the timing of future changes in economic conditions, or to accurately estimate the impacts of future changes in economic conditions to our borrowers, the accuracy of our loss forecasts and allowance estimates could be adversely impacted.
Added
For these reasons and others, these types of loans present heightened lending risks that, if realized, may materially and adversely affect our business, financial condition or results of operations.
Added
Our nonperforming assets adversely affect our net income in various ways. We do not record interest income on nonaccrual loans, which adversely affects our income and increases loan administration costs.
Added
When we receive collateral through foreclosures and similar proceedings, we are required to mark the related loan to the then fair market value of the collateral less estimated selling costs, which may result in a loss.
Added
An increase in the level of nonperforming assets also increases our risk profile and may affect the minimum capital levels our regulators believe are appropriate for us in light of such risks. We use various techniques such as workouts, restructurings, and loan sales to manage problem assets.
Added
Increases in or negative adjustments in the value of these problem assets, the underlying collateral, or in the borrowers’ performance or financial condition, could adversely affect our business, results of operations, and financial condition.
Added
In addition, the resolution of nonperforming assets requires significant commitments of time from management and staff, which can be detrimental to the performance of their other responsibilities. There can be no assurance that we will not experience increases in our nonperforming assets in the future, or that our nonperforming assets will not result in losses in the future.
Added
We maintain an enterprise risk management program that is designed to identify, assess, mitigate, monitor, and report the risks that we face. These risks include: strategic, credit, market (including interest-rate, capital, and liquidity), operational, regulatory (compliance), legal, and technology.
Added
While we assess and seek to improve this program on an ongoing basis, there can be no assurance that our risk management framework and related controls will effectively mitigate all risk and limit losses in our business.
Added
If conditions or circumstances arise that expose flaws or gaps in our risk-management program, or if our controls break down, our results of operations and financial condition may be adversely affected.
Added
We must also develop and maintain a culture of risk management among our employees, as well as manage risks associated with third parties, and we could fail to do so effectively.
Added
If our risk management framework is not effective, we could suffer unexpected losses and become subject to litigation, negative regulatory consequences, or reputational damage among other adverse consequences, which could materially adversely affect our business, financial condition, results of operations, and prospects.
Added
We depend on qualified employees and key personnel to operate and lead our business, and we may not be able to attract or retain them in the future.
Added
Substantial legal liability, which may not be insured, and significant regulatory actions against us could materially and adversely impact our business operations, including our ability to engage in mergers and acquisitions, our results of operations and our financial condition.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeIn addition to our information security team, we also employ an IT risk and compliance director who has over 18 years of IT governance, risk, and compliance experience and is responsible for the development, monitoring, and reporting of IT-related key risk indicators (“KRIs”), including KRIs related to cyber risks.
Biggest changeIn addition to our information security team, we also employ a senior vice president of IT governance and risk who has over 18 years of IT governance, risk, and compliance experience and is responsible for the development, monitoring, and reporting of IT-related key risk indicators (“KRIs”), including KRIs related to cyber risks.
To enhance awareness, monitoring, and oversight of cybersecurity risks, management also uses the following internal committees (in addition to the enterprise risk management committee discussed above): (1) the IT strategy and investment committee, which is comprised of senior executives and helps provide oversight of the investment and strategic direction for the Company’s IT function, (2) the IT steering committee, which is comprised of leaders from various business units and helps provide oversight and direction for inter- and intra-departmental IT related initiatives, and (3) the vulnerability management working group, which is comprised of IT leaders and helps establish appropriate roles, responsibilities, and escalation paths to resolve department and enterprise vulnerabilities within service level agreements. 32
To enhance awareness, monitoring, and oversight of cybersecurity risks, management also uses the following internal committees (in addition to the enterprise risk management committee discussed above): (1) the IT strategy and investment committee, which is comprised of senior executives and helps provide oversight of the investment and strategic direction for the Company’s IT function, (2) the IT steering committee, which is comprised of leaders from various business units and helps provide oversight and direction for inter- and intra-departmental IT related initiatives, and (3) the vulnerability management working group, which is comprised of IT leaders and helps establish appropriate roles, responsibilities, and escalation paths to resolve department and enterprise vulnerabilities within service level agreements.
Risk Factors” of this Form 10-K for more information. Governance Our board of directors is aware of, and takes seriously, the importance of overseeing risks associated with cybersecurity threats. Senior management has provided the board of directors with cybersecurity information, as well as incident response training. Additionally, employees have received training related to cybersecurity.
Risk Factors” of this Form 10-K for more information. 32 Governance Our board of directors is aware of, and takes seriously, the importance of overseeing risks associated with cybersecurity threats. Senior management has provided the board of directors with cybersecurity information, as well as incident response training. Additionally, employees have received training related to cybersecurity.
In connection with these efforts, we use, on an as-needed basis, certain third-parties, including auditors, consultants, and others, that have particular cyber expertise. 31 We also maintain multiple groups that help oversee risks associated with our third-party service providers.
In connection with these efforts, we use, on an as-needed basis, certain third-parties, including auditors, consultants, and others, that have particular cyber expertise. We also maintain multiple groups that help oversee risks associated with our third-party service providers.
See the risk factor “ Our business is heavily reliant on information technology systems, facilities, and processes; and a disruption in those systems, facilities, and processes, or a breach, including cyber-attacks, in the security of our systems, could have significant, negative impact on our business, result in the disclosure of confidential information, and create significant financial and legal exposure for us .” in “Item 1A.
See the risk factor “ Our business is heavily reliant on information technology systems, facilities, and processes; and a disruption in those systems, facilities, and processes, or a breach, including cyber-attacks, in the security of our systems, could have significant, negative impacts on our business, result in the disclosure of confidential information, and create significant financial and legal exposure for us .” in “Item 1A.
Risk Management and Strategy Our information security program is led by our chief information security officer (“CISO”), who has over 25 years of experience in technology management, has 8 years of banking experience, and is a certified information systems security professional.
Risk Management and Strategy Our information security program is led by our chief information security officer (“CISO”), who has over 25 years of experience in technology management, has 9 years of banking experience, and is a certified information systems security professional.
Both our CISO and our IT risk and compliance director report to our chief information officer (“CIO”), who has more than 25 years of technology leadership experience, including leadership experience at global financial institutions, and is responsible, among other things, for oversight of our information technology environment, strategy, and security risks.
Both our CISO and our senior vice president of IT governance and risk report to our chief information officer (“CIO”), who has more than 25 years of technology leadership experience, including leadership experience at global financial institutions, and is responsible, among other things, for oversight of our information technology environment, strategy, and security risks.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed2 unchanged
Biggest changeThe Company and its subsidiaries conduct financial operations from approximately 234 financial centers located in communities throughout Arkansas, Kansas, Missouri, Oklahoma, Tennessee and Texas. We believe our properties are suitable and adequate for our present operations.
Biggest changeThe Company and its subsidiaries conduct financial operations from approximately 222 financial centers located in communities throughout Arkansas, Kansas, Missouri, Oklahoma, Tennessee and Texas. We believe our properties are suitable and adequate for our present operations.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe repurchase authorization under the 2019 Program was substantially exhausted during January 2022. On January 27, 2022, we announced a new stock repurchase program (“2022 Program”) under which we may repurchase up to $175.0 million of our Class A Common Stock currently issued and outstanding. The 2022 Program replaced the 2019 Program.
Biggest changeIssuer Purchases of Equity Securities On January 27, 2022, we announced a stock repurchase program (“2022 Program”) under which we could repurchase up to $175.0 million of our Class A Common Stock currently issued and outstanding.
Information concerning our repurchases of Class A Common Stock during the quarter ended December 31, 2023 is as follows: Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs October 1, 2023 - October 31, 2023 — $ — — $ 39,922,000 November 1, 2023 - November 30, 2023 — — — $ 39,922,000 December 1, 2023 - December 31, 2023 — — — $ 39,922,000 Total — $ — — _________________________ (1) No shares of restricted stock were purchased in connection with employee tax withholding obligations under employee compensation plans, which are not purchases under any publicly announced plan. 34 Performance Graph The performance graph below compares the cumulative total shareholder return on the Company’s Common Stock with the cumulative total return of the Russell 2000 Index and the KBW Nasdaq Regional Banking Index.
Information concerning our repurchases of Class A Common Stock during the quarter ended December 31, 2024 is as follows: Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs October 1, 2024 - October 31, 2024 — $ — — $ 175,000,000 November 1, 2024 - November 30, 2024 — — — $ 175,000,000 December 1, 2024 - December 31, 2024 — — — $ 175,000,000 Total — $ — — _________________________ (1) No shares of restricted stock were purchased in connection with employee tax withholding obligations under employee compensation plans, which are not purchases under any publicly announced plan. 34 Performance Graph The performance graph below compares the cumulative total shareholder return on the Company’s Common Stock with the cumulative total return of the Russell 2000 Index and the KBW Nasdaq Regional Banking Index.
The graph assumes an investment of $100 on December 31, 2018 and reinvestment of dividends on the date of payment without commissions. The performance graph represents past performance and should not be considered as an indication of future performance.
The graph assumes an investment of $100 on December 31, 2019 and reinvestment of dividends on the date of payment without commissions. The performance graph represents past performance and should not be considered as an indication of future performance.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is listed on the Nasdaq Global Select Market under the symbol “SFNC.” As of February 23, 2024, there were approximately 2,379 shareholders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is listed on the Nasdaq Global Select Market under the symbol “SFNC.” As of February 24, 2025, there were approximately 2,249 shareholders of record of our common stock.
We anticipate funding for the 2024 Program to come from available sources of liquidity, including cash on hand and future cash flow. The Company made no purchases of its common stock during the three months ended December 31, 2023.
We anticipate funding for the 2024 Program to come from available sources of liquidity, including cash on hand and future cash flow.
Period Ending Index 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 Simmons First National Corporation 100.00 113.90 95.56 134.10 101.08 97.08 Russell 2000 Index 100.00 125.53 150.58 172.90 137.56 160.85 KBW Nasdaq Regional Banking Index 100.00 123.81 113.03 154.45 143.75 143.17
Period Ending Index 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 Simmons First National Corporation 100.00 83.90 117.73 88.75 85.23 99.47 Russell 2000 Index 100.00 119.96 137.74 109.59 128.14 142.93 KBW Nasdaq Regional Banking Index 100.00 91.29 124.74 116.10 115.64 130.90
Removed
Issuer Purchases of Equity Securities Effective July 23, 2021, our Board of Directors approved an amendment to the Company’s stock repurchase program originally approved in October 2019 and first amended in March 2020 (“2019 Program”) that increased the amount of our Class A Common Stock that may be repurchased under the 2019 Program from a maximum of $180.0 million to a maximum of $276.5 million and extended the term of the 2019 Program from October 31, 2021, to October 31, 2022.
Removed
As of December 31, 2023, the Company had approximately $39.9 million of remaining funds that could have been used to repurchase shares of the Company’s Class A Common Stock under the 2022 Program. The 2024 Program has since replaced the 2022 Program.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeTable 6: Noninterest Expense Years Ended December 31, 2023 Change from 2022 Change from (Dollars in thousands) 2023 2022 2021 2022 2021 Salaries and employee benefits $ 279,919 $ 286,982 $ 246,335 $ (7,063) (2.5) % $ 40,647 16.5 % Early retirement program 6,198 — — 6,198 * — — Occupancy expense, net 46,741 44,321 38,797 2,420 5.5 5,524 14.2 Furniture and equipment expense 20,741 20,665 19,890 76 0.4 775 3.9 Other real estate and foreclosure expense 892 1,003 2,121 (111) (11.1) (1,118) (52.7) Deposit insurance 19,465 11,608 6,973 7,857 67.7 4,635 66.5 FDIC special assessment 10,521 — — 10,521 * — — Merger related costs 1,420 22,476 15,911 (21,056) (93.7) 6,565 41.3 Other operating expenses: Professional services 19,612 19,138 18,921 474 2.5 217 1.2 Postage 9,458 8,955 8,276 503 5.6 679 8.2 Telephone 6,965 6,394 6,234 571 8.9 160 2.6 Credit card expenses 13,243 12,243 11,112 1,000 8.2 1,131 10.2 Marketing 24,008 28,870 22,234 (4,862) (16.8) 6,636 29.9 Software and technology 42,530 40,906 40,608 1,624 4.0 298 0.7 Operating supplies 2,591 2,556 2,766 35 1.4 (210) (7.6) Amortization of intangibles 16,306 15,915 13,494 391 2.5 2,421 17.9 Branch right sizing expense 5,467 3,475 (537) 1,992 57.3 4,012 * Other expense 36,984 41,241 30,454 (4,257) (10.3) 10,787 35.4 Total noninterest expense $ 563,061 $ 566,748 $ 483,589 $ (3,687) (0.7) % $ 83,159 17.2 % _________________________ *Not meaningful Due to our Better Bank Initiative and continuous efficiency improvements, we expect marginal growth in noninterest expense during 2024.
Biggest changeTable 6: Noninterest Expense Years Ended December 31, 2024 Change from 2023 Change from (Dollars in thousands) 2024 2023 2022 2023 2022 Salaries and employee benefits $ 283,588 $ 279,919 $ 286,982 $ 3,669 1.3 % $ (7,063) (2.5) % Early retirement program 536 6,198 — (5,662) (91.4) 6,198 * Occupancy expense, net 48,214 46,741 44,321 1,473 3.2 2,420 5.5 Furniture and equipment expense 22,047 20,741 20,665 1,306 6.3 76 0.4 Other real estate and foreclosure expense 700 892 1,003 (192) (21.5) (111) (11.1) Deposit insurance 23,938 29,986 11,608 (6,048) (20.2) 18,378 * Merger related costs — 1,420 22,476 (1,420) (100.0) (21,056) (93.7) Other operating expenses: Professional services 22,179 19,612 19,138 2,567 13.1 474 2.5 Postage 8,735 9,458 8,955 (723) (7.6) 503 5.6 Telephone 6,388 6,965 6,394 (577) (8.3) 571 8.9 Credit card expenses 12,886 13,243 12,243 (357) (2.7) 1,000 8.2 Marketing 27,369 24,008 28,870 3,361 14.0 (4,862) (16.8) Software and technology 42,939 42,530 40,906 409 1.0 1,624 4.0 Operating supplies 2,482 2,591 2,556 (109) (4.2) 35 1.4 Amortization of intangibles 15,403 16,306 15,915 (903) (5.5) 391 2.5 Branch right sizing expense 2,746 5,467 3,475 (2,721) (49.8) 1,992 57.3 Other expense 37,393 36,984 41,241 409 1.1 (4,257) (10.3) Total noninterest expense $ 557,543 $ 563,061 $ 566,748 $ (5,518) (1.0) % $ (3,687) (0.7) % _________________________ *Not meaningful Due to our Better Bank Initiative and continuous efficiency improvements, offset by expected increases related to merit-based compensation adjustments and targeted investments during the upcoming period, we expect marginal growth in noninterest expense during 2025.
We believe the presentation of non-GAAP financial measures provides a meaningful basis for period-to-period and company-to-company comparisons, which we believe will assist investors and analysts in analyzing the core financial measures of the Company and predicting future performance. See the GAAP Reconciliation of Non-GAAP Measures section below for additional discussion and reconciliations of non-GAAP measures.
We believe the presentation of non-GAAP financial measures provides a meaningful basis for period-to-period and company-to-company comparisons, which we believe will assist investors and analysts in analyzing the core financial measures of the Company and predicting future performance. See the GAAP Reconciliation of Non-GAAP Financial Measures section below for additional discussion and reconciliations of non-GAAP measures.
Allowance for Credit Losses The allowance for credit losses is a reserve established through a provision for credit losses charged to expense which represents management’s best estimate of lifetime expected losses based on reasonable and supportable forecasts, quantitative factors, and other qualitative considerations.
Allowance for Credit Losses The allowance for credit losses is a reserve established through a provision for credit losses charged to expense which represents management’s best estimate of lifetime expected losses based on reasonable and supportable forecasts, quantitative factors, and other qualitative considerations.
We believe that presenting these non-GAAP financial measures will permit investors and analysts to assess the performance of the Company on the same basis as that is applied by management and the Board of Directors. Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied and are not audited.
We believe that presenting these non-GAAP financial measures will permit investors and analysts to assess the performance of the Company on the same basis that is applied by management and the Board of Directors. Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied and are not audited.
From and including July 31, 2025, to, but excluding, the maturity date or earlier redemption date, the interest rate will reset quarterly to an interest rate per annum equal to a benchmark rate, which is expected to be the then-current three-month Secured Overnight Financing Rate, as published by the Federal Reserve Bank of New York (provided, that in the event the benchmark rate is less than zero, the benchmark rate will be deemed to be zero) plus 592 basis points, payable quarterly, in arrears. 57 Aggregate annual maturities of long-term debt at December 31, 2023 are presented in Table 17.
From and including July 31, 2025, to, but excluding, the maturity date or earlier redemption date, the interest rate will reset quarterly to an interest rate per annum equal to a benchmark rate, which is expected to be the then-current three-month Secured Overnight Financing Rate, as published by the Federal Reserve Bank of New York (provided, that in the event the benchmark rate is less than zero, the benchmark rate will be deemed to be zero) plus 592 basis points, payable quarterly, in arrears. 57 Aggregate annual maturities of long-term debt at December 31, 2024 are presented in Table 17.
We charged-off $7.0 million directly related to one corporate bond, which was deemed uncollectible in the period, while the remaining isolated bonds were sold or experienced price recovery on previous impairments prior to the end of the period.
We also charged-off $7.0 million directly related to one corporate bond, which was deemed uncollectible in the period, while the remaining isolated bonds were sold or experienced price recovery on previous impairments prior to the end of the period.
Pursuant to the plans, shares are reserved for future issuance by the Company upon exercise of stock options or awarding of restricted stock, restricted stock units, performance stock units or stock awards granted to directors, officers and other key employees.
Pursuant to the plans, shares are reserved for future issuance by the Company upon exercise of stock options or awarding of restricted stock, restricted stock units or performance stock units granted to directors, officers and other key employees.
Furthermore, as of December 31, 2023, we also have the ability to hold the securities classified as AFS for a period of time sufficient for a recovery of amortized cost, we do not have an immediate intent to sell the securities classified as AFS, and we believe the accounting standard of “more likely than not” has not been met regarding whether we would be required to sell any of the AFS securities before recovery of amortized cost.
Furthermore, as of December 31, 2024, we also have the ability to hold the securities classified as AFS for a period of time sufficient for a recovery of amortized cost, we do not have an immediate intent to sell the securities classified as AFS, and we believe the accounting standard of “more likely than not” has not been met regarding whether we would be required to sell any of the AFS securities before recovery of amortized cost.
On November 30, 2021, we redeemed all of the Series D Preferred Stock, including accrued and unpaid dividends. On April 27, 2022, our shareholders approved an amendment to our Articles of Incorporation to remove the classification and designation for the Series D Preferred Stock. As of December 31, 2023, there were no shares of preferred stock issued or outstanding.
On November 30, 2021, we redeemed all of the Series D Preferred Stock, including accrued and unpaid dividends. On April 27, 2022, our shareholders approved an amendment to our Articles of Incorporation to remove the classification and designation for the Series D Preferred Stock. As of December 31, 2024, there were no shares of preferred stock issued or outstanding.
An allowance for credit losses related to mortgage-backed securities and U.S. government agencies was not recorded as of December 31, 2023 due to those securities being explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies and have a long history of no credit losses.
An allowance for credit losses related to mortgage-backed securities and U.S. government agencies was not recorded as of December 31, 2024 due to those securities being explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies and have a long history of no credit losses.
Accordingly, as of December 31, 2023, we believe the declines in fair value detailed in the table below are temporary and we do not believe any of the securities are impaired due to reasons of credit quality. 53 Table 12 presents the amortized cost, fair value and allowance for credit losses on investment securities for each of the years indicated.
Accordingly, as of December 31, 2024, we believe the declines in fair value detailed in the table below are temporary and we do not believe any of the securities are impaired due to reasons of credit quality. 53 Table 12 presents the amortized cost, fair value and allowance for credit losses on investment securities for each of the years indicated.
Our allowance for credit losses at December 31, 2023 was considered appropriate given the current economic environment and other related factors. 51 The following table sets forth the sum of the amounts of the allowance for credit losses attributable to individual loans within each category, or loan categories in general.
Our allowance for credit losses at December 31, 2024 was considered appropriate given the current economic environment and other related factors. 51 The following table sets forth the sum of the amounts of the allowance for credit losses attributable to individual loans within each category, or loan categories in general.
During 2024, we will continue to evaluate targeted sales of AFS securities based on prevailing market conditions and our funding and liquidity positions. The unrealized losses during 2023 are largely due to increases in market interest rates over the yields available at the time the underlying securities were purchased.
During 2025, we will continue to evaluate targeted sales of AFS securities based on prevailing market conditions and our funding and liquidity positions. The unrealized losses during 2024 are largely due to increases in market interest rates over the yields available at the time the underlying securities were purchased.
Additionally, during the third quarter of 2021, we began utilizing interest rate swaps designated as fair value hedges to mitigate the effect of changing interest rates on the fair values of $1.0 billion of fixed rate callable municipal securities held in the AFS portfolio.
Additionally, during the third quarter of 2021, we began utilizing interest rate swaps designated as fair value hedges to mitigate the effect of changing interest rates on the fair values of $1.00 billion of fixed rate callable municipal securities held in the AFS portfolio.
Management believes that, as of December 31, 2023, we met all capital adequacy requirements to which we are subject. As of the most recent notification from regulatory agencies, Simmons Bank was well capitalized under the regulatory framework for prompt corrective action.
Management believes that, as of December 31, 2024, we met all capital adequacy requirements to which we are subject. As of the most recent notification from regulatory agencies, Simmons Bank was well capitalized under the regulatory framework for prompt corrective action.
Assumptions used in calculating the cost of equity are obtained from market and third-party data. Results are compared to book value and no impairment was indicated as of December 31, 2023. Judgement is inherent in assessing goodwill for impairment.
Assumptions used in calculating the cost of equity are obtained from market and third-party data. Results are compared to book value; no impairment was indicated as of December 31, 2024. Judgement is inherent in assessing goodwill for impairment.
Table 13: Maturity Distribution of Investment Securities December 31, 2023 Over Over 1 year 5 years Total 1 year through through Over No fixed Amortized Par Fair (In thousands) or less 5 years 10 years 10 years maturity Cost Value Value Held-to-Maturity U.S.
Table 13: Maturity Distribution of Investment Securities December 31, 2024 Over Over 1 year 5 years Total 1 year through through Over No fixed Amortized Par Fair (In thousands) or less 5 years 10 years 10 years maturity Cost Value Value Held-to-Maturity U.S.
The allocation in each category within the allowance generally reflects the overall changes in the loan portfolio mix. The increase in the allowance for credit losses during 2023 was predominantly due to the loan growth experienced during the year, as well as refreshed economic forecasts.
The allocation in each category within the allowance generally reflects the overall changes in the loan portfolio mix. The increase in the allowance for credit losses during 2024 was predominantly due to the loan growth experienced during the year, as well as refreshed economic forecasts.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis presents the more significant factors that affected our financial condition as of December 31, 2023 and 2022 and results of operations for each of the years then ended.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis presents the more significant factors that affected our financial condition as of December 31, 2024 and 2023 and results of operations for each of the years then ended.
Table 12: Investment Securities (In thousands) Amortized Cost Allowance for Credit Losses Net Carrying Amount Gross Unrealized Gains Gross Unrealized (Losses) Estimated Fair Value Held-to-maturity December 31, 2023 U.S.
Table 12: Investment Securities (In thousands) Amortized Cost Allowance for Credit Losses Net Carrying Amount Gross Unrealized Gains Gross Unrealized (Losses) Estimated Fair Value Held-to-maturity December 31, 2024 U.S.
Table 14 reflects the classification of the average deposits and the average rate paid on each deposit category which is in excess of 10 percent of average total deposits for the three years ended December 31, 2023.
Table 14 reflects the classification of the average deposits and the average rate paid on each deposit category which is in excess of 10 percent of average total deposits for the three years ended December 31, 2024.
Management and the Board of Directors utilize “adjusted diluted earnings per share” (non-GAAP) for the following purposes: • Calculation of annual performance-based incentives for certain executives • Calculation of long-term performance-based incentives for certain executives • Investor presentations of Company performance 61 We have $1.43 billion and $1.45 billion total goodwill and other intangible assets for the periods ended December 31, 2023 and 2022, respectively.
Management and the Board of Directors utilize “adjusted diluted earnings per share” (non-GAAP) for the following purposes: • Calculation of annual performance-based incentives for certain executives • Calculation of long-term performance-based incentives for certain executives • Investor presentations of Company performance 61 We have $1.42 billion and $1.43 billion total goodwill and other intangible assets for the periods ended December 31, 2024 and 2023, respectively.
For the year ended December 31, 2023, the net amount included in interest income on investment securities in the consolidated statements of income related to these swap agreements was $11.9 million. The adoption of ASU 2016-13 at the beginning of 2020 required us to replace the existing impairment models for financial assets, which includes investment securities.
For the year ended December 31, 2024, the net amount included in interest income on investment securities in the consolidated statements of income related to these swap agreements was $42.9 million. The adoption of ASU 2016-13 at the beginning of 2020 required us to replace the existing impairment models for financial assets, which includes investment securities.
Refer to the accompanying notes to consolidated financial statements elsewhere in this report for the expected timing of such payments as of December 31, 2023.
Refer to the accompanying notes to consolidated financial statements elsewhere in this report for the expected timing of such payments as of December 31, 2024.
Uninsured deposits (excluding collateralized deposits and intercompany deposits) as of December 31, 2023 were approximately $4.75 billion, or 21% of total deposits. • Capital levels were steady during the year, with all regulatory capital ratios remaining significantly above “well-capitalized” guidelines as of December 31, 2023 (see Table 18 in the Risk Based Capital section below).
Uninsured deposits (excluding collateralized deposits and intercompany deposits) as of December 31, 2024 were approximately $4.63 billion, or 21% of total deposits. • Capital levels were steady during the year, with all regulatory capital ratios remaining significantly above “well-capitalized” guidelines as of December 31, 2024 (see Table 18 in the Risk-Based Capital section below).
Our practice is to limit exposure to interest rate movements by maintaining a significant portion of earning assets and interest bearing liabilities in short-term repricing. In the last several years, on average, approximately 41% of our loan portfolio and approximately 89% of our time deposits have repriced in one year or less.
Our practice is to limit exposure to interest rate movements by maintaining a significant portion of earning assets and interest bearing liabilities in short-term repricing. In the last several years, on average, approximately 44% of our loan portfolio and approximately 92% of our time deposits have repriced in one year or less.
Payment of dividends by Simmons Bank is subject to various regulatory limitations. The Company continually assesses its capital and liquidity needs and the best way to meet them, including, without limitation, through capital raising in the market via stock or debt offerings.
Payment of dividends by Simmons Bank is subject to various regulatory limitations and, in certain instances, regulatory approval requirements. The Company continually assesses its capital and liquidity needs and the best way to meet them, including, without limitation, through capital raising in the market via stock or debt offerings.
GAAP Reconciliation of Non-GAAP Financial Measures The tables below present computations of adjusted earnings (net income excluding certain items {gain on sale of branches, early retirement program costs, loss from early retirement of TruPS, gain on sale of intellectual property, gain on insurance settlement, donation to Simmons First Foundation, merger related costs, FDIC special assessment, loss (gain) on sale of securities, net branch right sizing costs, and the Day 2 CECL Provision}) (non-GAAP) and adjusted diluted earnings per share (non-GAAP) as well as a computation of tangible book value per common share (non-GAAP), tangible common equity to tangible assets (non-GAAP), adjusted noninterest income (non-GAAP), adjusted noninterest expense (non-GAAP), adjusted salaries and employee benefits expense (non-GAAP) and the coverage ratio of uninsured, non-collateralized deposits (non-GAAP).
GAAP Reconciliation of Non-GAAP Financial Measures The tables below present computations of adjusted earnings (net income excluding certain items {early retirement program costs, loss from early retirement of TruPS, gain on sale of intellectual property, gain on insurance settlement, donation to Simmons First Foundation, merger related costs, FDIC special assessment, loss on sale of securities, termination of vendor and software services, net branch right sizing costs, Day 2 CECL Provision and tax effect}) (non-GAAP) and adjusted diluted earnings per share (non-GAAP) as well as a computation of tangible book value per common share (non-GAAP), tangible common equity to tangible assets (non-GAAP), adjusted noninterest income (non-GAAP), adjusted noninterest expense (non-GAAP), adjusted salaries and employee benefits expense (non-GAAP), adjusted deposit insurance expense (non-GAAP), uninsured, non-collateralized deposits (non-GAAP) and the coverage ratio of uninsured, non-collateralized deposits (non-GAAP).
Credit card loans are generally charged off when payment of interest or principal exceeds 150 days past due. The credit card recovery group pursues account holders until it is determined, on a case-by-case basis, to be uncollectible. Total non-performing assets increased $27.8 million from December 31, 2022 to December 31, 2023.
Credit card loans are generally charged off when payment of interest or principal exceeds 150 days past due. The credit card recovery group pursues account holders until it is determined, on a case-by-case basis, to be uncollectible. Total non-performing assets increased $31.0 million from December 31, 2023 to December 31, 2024.
At December 31, 2023, our common equity to asset ratio was 12.53% compared to 11.91% at year-end 2022. Capital Stock On February 27, 2009, at a special meeting, our shareholders approved an amendment to the Articles of Incorporation to establish 40,040,000 authorized shares of preferred stock, $0.01 par value.
At December 31, 2024, our common equity to asset ratio was 13.13% compared to 12.53% at year-end 2023. Capital Stock On February 27, 2009, at a special meeting, our shareholders approved an amendment to the Articles of Incorporation to establish 40,040,000 authorized shares of preferred stock, $0.01 par value.
As a result of the other CRE loan modified during the year ended December 31, 2023 being collateral-dependent, the impact to our allowance for credit losses on loans was the difference between the fair value of the underlying collateral, adjusted for selling costs, and the remaining outstanding principal balance of the loan. 49 We continue to maintain good asset quality, compared to the industry, and strong asset quality remains a primary focus for us.
As a result of the CRE loan modified during the year ended December 31, 2024 being collateral-dependent, the impact to the Company’s allowance for credit losses on loans was the difference between the fair value of the underlying collateral, adjusted for selling costs, and the remaining outstanding principal balance of the loan. 49 We continue to maintain good asset quality compared to the industry, and strong asset quality remains a primary focus of our strategy.
Table 16: Short-Term Borrowings December 31, (Dollars in thousands) 2023 2022 2021 Amount outstanding at year-end $ 950,000 $ 835,000 $ — Weighted-average interest rate at year-end 5.40 % 4.20 % — % Maximum amount outstanding at any month-end during the year $ 1,350,000 $ 1,300,000 $ — Average amount outstanding during the year $ 1,149,387 $ 1,124,314 $ — Weighted-average interest rate for the year 5.20 % 2.08 % — % During the third quarter of 2022, we redeemed the five issuances of trust preferred securities which had an outstanding aggregate principal amount of $56.2 million.
Table 16: Short-Term Borrowings December 31, (Dollars in thousands) 2024 2023 2022 Amount outstanding at year-end $ 725,000 $ 950,000 $ 835,000 Weighted-average interest rate at year-end 4.42 % 5.40 % 4.20 % Maximum amount outstanding at any month-end during the year $ 1,400,000 $ 1,350,000 $ 1,300,000 Average amount outstanding during the year $ 1,024,426 $ 1,149,387 $ 1,124,314 Weighted-average interest rate for the year 5.31 % 5.20 % 2.08 % During the third quarter of 2022, we redeemed the five issuances of trust preferred securities which had an outstanding aggregate principal amount of $56.2 million.
Refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K filed with the SEC on February 27, 2023 (the “ 2022 Form 10-K ”) for a discussion and analysis of the more significant factors that affected the 2021 period, which are incorporated herein by reference.
Refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K filed with the SEC on February 27, 2024 (the “ 202 3 Form 10-K ”) for a discussion and analysis of the more significant factors that affected the 2022 period, which are incorporated herein by reference.
While loan growth was widespread throughout our geographic markets and was generally broad-based by loan type during the period, loan growth during the latter half of 2023 reflected moderating demand and increased payoff activity, as we focus on maintaining disciplined pricing and conservative underwriting standards given the current uncertain economic environment.
While loan growth was widespread throughout our geographic markets and was generally broad-based by loan type during the period, loan growth during the year reflected moderating demand and increased payoff activity, as we focus on maintaining disciplined pricing and conservative underwriting standards given the current uncertain economic environment.
On March 31, 2021, we filed a shelf registration with the SEC. The shelf registration statement provides increased flexibility and more efficient access to raise capital from time to time through the sale of common stock, preferred stock, debt securities, depository shares, warrants, purchase contracts, purchase units, subscription rights, units or a combination thereof, subject to market conditions.
On May 17, 2024, we filed a shelf registration with the SEC. The shelf registration statement provides increased flexibility and more efficient access to raise capital from time to time through the sale of common stock, preferred stock, debt securities, depository shares, warrants, purchase contracts, subscription rights, units or a combination thereof, subject to market conditions.
The financial effects of the modified loans made to borrowers experiencing financial difficulty in the single family residential real estate and commercial portfolio were not significant during the year ended December 31, 2023 and did not significantly impact our determination of the allowance for credit losses on loans during the year.
The financial effects of the modified loans made to borrowers experiencing financial difficulty in the single family residential real estate portfolio were not significant during the year ended December 31, 2024 and did not significantly impact the Company’s determination of the allowance for credit losses on loans during the year.
Cash Dividends We declared cash dividends on our common stock of $0.80 per share for the twelve months ended December 31, 2023, compared to $0.76 per share for the twelve months ended December 31, 2022, an increase of $0.04, or 5%.
Cash Dividends We declared cash dividends on our common stock of $0.84 per share for the twelve months ended December 31, 2024, compared to $0.80 per share for the twelve months ended December 31, 2023, an increase of $0.04, or 5%.
We continually monitor and look for opportunities to fairly reprice our deposits while remaining competitive in this current challenging rate environment. Our net interest margin on a fully tax equivalent basis was 2.78% for the year ended December 31, 2023, down 39 basis points from 2022.
We continually monitor and look for opportunities to fairly reprice our deposits while remaining competitive in this current challenging rate environment. Our net interest margin on a fully tax equivalent basis was 2.74% for the year ended December 31, 2024, down 4 basis points from 2023.
The pipeline includes $416.0 million in loans approved and ready to close at the end of the year. 47 The balances of loans outstanding at the indicated dates are reflected in Table 7, according to type of loan.
The pipeline includes $551.8 million in loans approved and ready to close at the end of the year. 47 The balances of loans outstanding at the indicated dates are reflected in Table 7, according to type of loan.
Asset quality metrics remain strong and reflect our conservative credit culture, as well as our focus on maintaining disciplined pricing and conservative underwriting standards given the current economic environment. Total nonperforming loans as of December 31, 2023 were $84.5 million, as compared to $58.9 million at December 31, 2022.
Our asset quality metrics remain strong and reflect our conservative credit culture, as well as our focus on maintaining disciplined pricing and conservative underwriting standards given the current economic environment. Total nonperforming loans as of December 31, 2024 were $110.8 million, as compared to $84.5 million at December 31, 2023.
Consumer loans consist of credit card loans and other consumer loans. Consumer loans were $318.7 million at December 31, 2023, or 1.9% of total loans, compared to $349.8 million, or 2.2% of total loans at December 31, 2022. The decrease in consumer loans was primarily due to loan payoffs and pay downs within the other consumer portfolio during the year.
Consumer loans consist of credit card loans and other consumer loans. Consumer loans were $309.0 million at December 31, 2024, or 1.8% of total loans, compared to $318.7 million, or 1.9% of total loans at December 31, 2023. The decrease in consumer loans was primarily due to loan payoffs and pay downs within the credit card portfolio during the year.
For the years ended December 31, 2023, 2022 and 2021, interest income included $8.8 million, $23.9 million and $22.1 million, respectively, for the yield accretion recognized on loans acquired.
For the years ended December 31, 2024, 2023 and 2022, interest income included $6.1 million, $8.8 million and $23.9 million, respectively, for the yield accretion recognized on loans acquired.
Noninterest income also includes income on the sale of mortgage loans, income from the increase in cash surrender values of bank owned life insurance and gains (losses) from sales of securities. Total noninterest income was $155.6 million in 2023, compared to $170.1 million in 2022 and $191.8 million in 2021.
Noninterest income also includes income on the sale of mortgage loans, income from the increase in cash surrender values of bank owned life insurance and gains (losses) from sales of securities. Total noninterest income was $147.2 million in 2024, compared to $155.6 million in 2023 and $170.1 million in 2022.
Qualifying subordinated debt of $300.1 million is included as Tier 2 and total capital of the Company as of December 31, 2023. Liquidity In the normal course of business we have entered into a number of contractual obligations and have made commitments to make future payments.
Qualifying subordinated debt of $234.3 million is included as Tier 2 and total capital of the Company as of December 31, 2024. Liquidity In the normal course of business we have entered into a number of contractual obligations and have made commitments to make future payments.
It is management’s practice to review the allowance on a monthly basis and, after considering the factors previously noted, to determine the level of provision made to the allowance. During 2023, our provision for credit loss expense was $42.0 million, as compared to an expense of $14.1 million during 2022 and a recapture of $32.7 million during 2021.
It is management’s practice to review the allowance on a monthly basis and, after considering the factors previously noted, to determine the level of provision made to the allowance. During 2024, our provision for credit loss expense was $46.8 million, as compared to an expense of $42.0 million during 2023 and an expense of $14.1 million during 2022.
As of December 31, 2023, the related remaining combined net unrealized losses of $126.4 million in accumulated other comprehensive income (loss) will be amortized over the remaining life of the securities. No gains or losses on these securities were recognized at the time of transfer.
As of December 31, 2024, the related remaining combined net unrealized losses of $108.1 million in accumulated other comprehensive income (loss) will be amortized over the remaining life of the securities. No gains or losses on these securities were recognized at the time of transfer.
We offer a variety of products designed to attract and retain customers with a continuing focus on developing core deposits. Our core deposits consist of all deposits excluding time deposits of $250,000 or more and brokered deposits. As of December 31, 2023, core deposits comprised 79.2% of our total deposits.
We offer a variety of products designed to attract and retain customers with a continuing focus on developing core deposits. Our core deposits consist of all deposits excluding time deposits of $250,000 or more and brokered deposits. As of December 31, 2024, core deposits comprised 77.8% of our total deposits.
On a quarterly basis, management also reviews circumstances and developments in tax law affecting the reasonableness of deferred tax assets and liabilities and reserves for contingent tax liabilities. 37 2023 Overview Our net income available to common shareholders for the year ended December 31, 2023 was $175.1 million, or $1.38 diluted earnings per share, compared to $256.4 million, or $2.06 diluted earnings per share, for the same period in 2022.
On a quarterly basis, management also reviews circumstances and developments in tax law affecting the reasonableness of deferred tax assets and liabilities and reserves for contingent tax liabilities. 37 2024 Overview Our net income available to common shareholders for the year ended December 31, 2024 was $152.7 million, or $1.21 diluted earnings per share, compared to $175.1 million, or $1.38 diluted earnings per share, for the same period in 2023.
Simmons First National Corporation is an Arkansas-based financial holding company that, as of December 31, 2023, has approximately $27.35 billion in consolidated assets and, through its subsidiaries, conducts financial operations in Arkansas, Kansas, Missouri, Oklahoma, Tennessee and Texas.
Simmons First National Corporation is an Arkansas-based financial holding company that, as of December 31, 2024, has approximately $26.88 billion in consolidated assets and, through its subsidiaries, conducts financial operations in Arkansas, Kansas, Missouri, Oklahoma, Tennessee and Texas.
Our commercial loan pipeline consisting of all commercial loan opportunities was $948.2 million at December 31, 2023, compared to $1.12 billion at December 31, 2022.
Our commercial loan pipeline consisting of all commercial loan opportunities was $1.26 billion at December 31, 2024, compared to $948.2 million at December 31, 2023.
Annualized net credit card charge-offs to average total credit card loans were 2.20%, compared to 1.49% during 2022, and 129 basis points better than the most recently published industry average charge-off ratio as reported by the Federal Reserve for all banks.
Annualized net credit card charge-offs to average total credit card loans were 2.93%, compared to 2.20% during 2023, and 144 basis points better than the most recently published industry average charge-off ratio as reported by the Federal Reserve for all banks.
The $415.6 million increase in interest expense is mostly due to the increase in our deposit account rates over the period, combined with the additional deposit base from the Spirit acquisition and change in deposit mix as the market experiences a shift in consumer sentiment given the attractiveness of higher yielding time deposits in the current higher interest rate environment.
The $123.6 million increase in interest expense is mostly due to the increase in our deposit account rates over the period, combined with the change in deposit mix as the market experiences a shift in consumer sentiment given the attractiveness of higher yielding time deposits in the current higher interest rate environment.
Examples of these commitments include but are not limited to long-term debt financing (Note 12, Other Borrowings and Subordinated Debentures), operating lease obligations (Note, 6, Right-of-Use Lease Assets and Lease Liabilities), time deposits with stated maturity dates (Note 9, Time Deposits), and unfunded loan commitments and letters of credit (Note 19, Commitments and Credit Risk).
Examples of these commitments include but are not limited to long-term debt financing (Note 11, Other Borrowings and Subordinated Debentures), operating lease obligations (Note, 5, Right-of-Use Lease Assets and Lease Liabilities), time deposits with stated maturity dates (Note 8, Time Deposits), and unfunded loan commitments and letters of credit (Note 18, Commitments and Credit Risk).
Our current interest rate sensitivity shows that approximately 42% of our loans and 94% of our time deposits will reprice in the next year, largely contributing to our liability-sensitive position at December 31, 2023.
Our current interest rate sensitivity shows that approximately 49% of our loans and 97% of our time deposits will reprice in the next year, largely contributing to our liability-sensitive position at December 31, 2024.
Mortgage volume experienced an increase in demand during 2023 as compared to 2022, and was coupled with continued organic growth in our municipal loans during the period, leading to an increase of $92.8 million in other loans.
Mortgage volume experienced an increase in demand during 2024 as compared to 2023, and was coupled with continued organic growth in our municipal loans during the period, leading to an increase of $144.2 million in other loans.
Based upon our analysis of the underlying risk characteristics of the AFS portfolio, including credit ratings and other qualitative factors, no allowance for credit losses related to AFS securities was deemed necessary at December 31, 2023 and 2022. Our allowance for credit losses related to HTM securities was $3.2 million and $1.4 million at December 31, 2023 and 2022, respectively.
Based upon our analysis of the underlying risk characteristics of the AFS portfolio, including credit ratings and other qualitative factors, no allowance for credit losses related to AFS securities was deemed necessary at December 31, 2024 and 2023. Our allowance for credit losses related to HTM securities was $3.2 million for both periods ended December 31, 2024 and 2023.
There are no securities of any one state or political subdivision issuer exceeding ten percent of our stockholders’ equity at December 31, 2023. 52 We had approximately $3.10 billion, or 45.1%, of our total portfolio invested in mortgaged-backed securities at December 31, 2023. These mortgage-backed securities were issued by agencies of the U.S. government.
There are no securities of any one state or political subdivision issuer exceeding ten percent of our stockholders’ equity at December 31, 2024. 52 We had approximately $2.46 billion, or 39.9%, of our total portfolio invested in mortgaged-backed securities at December 31, 2024. These mortgage-backed securities were issued by agencies of the U.S. government.
We had $2.90 billion and $2.75 billion of brokered deposits at December 31, 2023, and December 31, 2022, respectively. Our uninsured deposits as of December 31, 2023 and 2022 were $4.75 billion and $5.63 billion, respectively.
We had $3.30 billion and $2.90 billion of brokered deposits at December 31, 2024, and December 31, 2023, respectively. Our uninsured deposits as of December 31, 2024 and 2023 were $4.63 billion and $4.75 billion, respectively.
Income Taxes The provision for income taxes for 2023 was $25.5 million, compared to $50.1 million in 2022 and $61.3 million in 2021. The effective income tax rates for the years ended 2023, 2022 and 2021 were 12.7%, 16.4% and 18.4%, respectively.
Income Taxes The provision for income taxes for 2024 was $18.6 million, compared to $25.5 million in 2023 and $50.1 million in 2022. The effective income tax rates for the years ended 2024, 2023 and 2022 were 10.9%, 12.7% and 16.4%, respectively.
HTM and AFS investment securities were $3.73 billion and $3.15 billion, respectively, at December 31, 2023, compared to the HTM amount of $3.76 billion and AFS amount of $3.85 billion at December 31, 2022. We will continue to look for opportunities to maximize the value of the investment portfolio.
HTM and AFS investment securities were $3.64 billion and $2.53 billion, respectively, at December 31, 2024, compared to the HTM amount of $3.73 billion and AFS amount of $3.15 billion at December 31, 2023. We will continue to look for opportunities to maximize the value of the investment portfolio.
Adjusting for these certain items, adjusted earnings for the year ended December 31, 2023 were $207.7 million, or $1.64 adjusted diluted earnings per share, compared to $298.8 million, or $2.40 adjusted diluted earnings per share, in 2022. See GAAP Reconciliation of Non-GAAP Financial Measures for additional discussion and reconciliations of non-GAAP measures.
Adjusting for these certain items, adjusted earnings for the year ended December 31, 2024 were $177.9 million, or $1.41 adjusted diluted earnings per share, compared to $207.7 million, or $1.64 adjusted diluted earnings per share, in 2023. See GAAP Reconciliation of Non-GAAP Financial Measures for additional discussion and reconciliations of non-GAAP measures.
We sold $241.1 million of low yield AFS securities late in the fourth quarter of 2023, and used sale proceeds to pay off higher rate wholesale fundings and we will continue to evaluate opportunities to optimize our balance sheet based on changing market conditions.
We sold $251.5 million of low yield AFS securities in the third quarter of 2024, and used sale proceeds to pay off higher rate wholesale fundings and we will continue to evaluate opportunities to optimize our balance sheet based on changing market conditions.
Table 23: Calculation of Uninsured, Non-Collateralized Deposit Coverage Ratio (non-GAAP) (In thousands) 2023 2022 Uninsured deposits at Simmons Bank $ 8,328,444 $ 8,913,990 Less: Collateralized deposits (excluding portion that is FDIC insured) 2,846,716 2,759,248 Less: Intercompany eliminations 728,480 529,042 Total uninsured, non-collateralized deposits $ 4,753,248 $ 5,625,700 FHLB borrowing availability $ 5,401,000 $ 5,442,000 Unpledged securities 3,817,000 3,180,000 Fed funds lines, Fed discount window and Bank Term Funding Program 1,998,000 1,982,000 Additional liquidity sources $ 11,216,000 $ 10,604,000 Uninsured, non-collateralized deposit coverage ratio 2.4x 1.9x 65
Table 23: Reconciliation of Uninsured, Non-Collateralized Deposits and the Calculation of Uninsured, Non-Collateralized Deposit Coverage Ratio (non-GAAP) (In thousands) 2024 2023 2022 Uninsured deposits at Simmons Bank $ 8,467,291 $ 8,328,444 $ 8,913,990 Less: Collateralized deposits (excluding portion that is FDIC insured) 2,790,339 2,846,716 2,759,248 Less: Intercompany eliminations 1,045,734 728,480 529,042 Total uninsured, non-collateralized deposits $ 4,631,218 $ 4,753,248 $ 5,625,700 FHLB borrowing availability $ 4,716,000 $ 5,401,000 $ 5,442,000 Unpledged securities 4,103,000 3,817,000 3,180,000 Fed funds lines, Fed discount window and Bank Term Funding Program (1) 2,081,000 1,998,000 1,982,000 Additional liquidity sources $ 10,900,000 $ 11,216,000 $ 10,604,000 Uninsured, non-collateralized deposit coverage ratio 2.4x 2.4x 1.9x ___________________________________ (1) The Bank Term Funding Program closed for new loans on March 11, 2024.
The net premium or discount on loans that are not classified as PCD (“non-PCD”), that includes credit and non-credit components, is accreted or amortized into interest income over the remaining life of the loan using a constant yield method. We then record the necessary allowance for credit losses on the non-PCD loans through provision for credit losses expense.
The net premium or discount on loans that are not classified as PCD (“non-PCD”), that includes credit and non-credit components, is accreted or amortized into interest income over the remaining life of the loan using a constant yield method.
The decrease in the provision for income taxes during 2023 was primarily due to tax exempt income having a larger favorable impact on the rate and lower state taxes in 2023, both driven by the one time charges to income from the loss on sale of securities and the FDIC special assessment. 46 Loan Portfolio Our loan portfolio averaged $16.65 billion during 2023 and $14.42 billion during 2022.
The decrease in the provision for income taxes during 2024 as compared to 2023 and 2023 as compared to 2022 was primarily due to tax exempt income having a larger favorable impact on the rate and lower state taxes during the periods, both driven by the one time charges to income from the loss on sale of securities during each respective period, in addition to the FDIC special assessment largely recognized during 2023. 46 Loan Portfolio Our loan portfolio averaged $17.11 billion during 2024 and $16.65 billion during 2023.
We are continually monitoring and looking for opportunities to fairly reprice our deposits while remaining competitive in this current challenging rate environment. Our total deposits as of December 31, 2023, were $22.24 billion, a decrease of $303.1 million from December 31, 2022.
We are continually monitoring and looking for opportunities to fairly reprice our deposits while remaining competitive in this current challenging rate environment. Our total deposits as of December 31, 2024, were $21.89 billion, a decrease of $359.2 million from December 31, 2023.
A summary of information related to our FHLB short-term advances, consisting of fixed rate, fixed term advances, is presented in Table 16.
A summary of information related to our FHLB short-term advances, consisting of primarily whole loan advances, is presented in Table 16.
Government agencies $ 453,121 $ — $ 453,121 $ — $ (89,203) $ 363,918 Mortgage-backed securities 1,161,694 — 1,161,694 354 (107,834) 1,054,214 State and political subdivisions 1,858,680 (2,006) 1,856,674 284 (369,509) 1,487,449 Other securities 256,007 (1,208) 254,799 — (25,010) 229,789 Total HTM $ 3,729,502 $ (3,214) $ 3,726,288 $ 638 $ (591,556) $ 3,135,370 December 31, 2022 U.S.
Government agencies $ 453,121 $ — $ 453,121 $ — $ (89,203) $ 363,918 Mortgage-backed securities 1,161,694 — 1,161,694 354 (107,834) 1,054,214 State and political subdivisions 1,858,680 (2,006) 1,856,674 284 (369,509) 1,487,449 Other securities 256,007 (1,208) 254,799 — (25,010) 229,789 Total HTM $ 3,729,502 $ (3,214) $ 3,726,288 $ 638 $ (591,556) $ 3,135,370 (In thousands) Amortized Cost Allowance for Credit Losses Gross Unrealized Gains Gross Unrealized (Losses) Estimated Fair Value Available-for-sale December 31, 2024 U.S.
Additionally, while our most likely forecast embeds several rate cuts during 2024, there is still much uncertainty as to decisions that will be made by the FOMC and the risks present in the economy. 40 Tables 1 and 2 reflect an analysis of net interest income on a fully taxable equivalent basis for the years ended December 31, 2023, 2022 and 2021, respectively, as well as changes in fully taxable equivalent net interest margin for the years 2023 versus 2022 and 2022 versus 2021.
Additionally, while our balance sheet is in a favorable position for the repricing of assets and liabilities, there is still much uncertainty as to decisions that will be made by the FOMC and the risks present in the economy. 40 Tables 1 and 2 reflect an analysis of net interest income on a fully taxable equivalent basis for the years ended December 31, 2024, 2023 and 2022, respectively, as well as changes in fully taxable equivalent net interest margin for the years 2024 versus 2023 and 2023 versus 2022.
Table 19: Reconciliation of Adjusted Earnings (non-GAAP) (In thousands, except per share data) 2023 2022 2021 Net income available to common stockholders $ 175,057 $ 256,412 $ 271,109 Certain items: Gain on sale of branches — — (5,316) Loss from early retirement of TruPS — 365 — Gain on sale of intellectual property — (750) — Gain on insurance settlement — (4,074) — FDIC special assessment 10,521 — — Donation to Simmons First Foundation — 1,738 — Merger related costs 1,420 22,476 15,911 Early retirement program 6,198 — — Loss (gain) on sale of securities 20,609 278 (15,498) Branch right sizing, net 5,467 3,628 (906) Day 2 CECL Provision — 33,779 22,688 Tax effect (1) (11,556) (15,012) (4,413) Certain items, net of tax 32,659 42,428 12,466 Adjusted earnings (non-GAAP) $ 207,716 $ 298,840 $ 283,575 Diluted earnings per share $ 1.38 $ 2.06 $ 2.46 Certain items: Gain on sale of branches — — (0.05) Loss from early retirement of TruPS — — — Gain on sale of intellectual property — (0.01) — Gain on insurance settlement — (0.03) — FDIC special assessment 0.08 — — Donation to Simmons First Foundation — 0.01 — Merger related costs 0.01 0.18 0.14 Early retirement program 0.05 — — Loss (gain) on sale of securities 0.17 — (0.14) Branch right sizing, net 0.04 0.03 (0.01) Day 2 CECL Provision — 0.28 0.21 Tax effect (1) (0.09) (0.12) (0.04) Certain items, net of tax 0.26 0.34 0.11 Adjusted diluted earnings per share (non-GAAP) $ 1.64 $ 2.40 $ 2.57 _________________________ (1) Effective tax rate of 26.135%. 63 See Table 20 below for the reconciliation of adjusted noninterest income, adjusted noninterest expense and adjusted salaries and employee benefits expense for the periods presented.
Table 19: Reconciliation of Adjusted Earnings (non-GAAP) (In thousands, except per share data) 2024 2023 2022 Net income available to common stockholders $ 152,693 $ 175,057 $ 256,412 Certain items: Termination of vendor and software services 602 — — Loss from early retirement of TruPS — — 365 Gain on sale of intellectual property — — (750) Gain on insurance settlement — — (4,074) FDIC special assessment 1,832 10,521 — Donation to Simmons First Foundation — — 1,738 Merger related costs — 1,420 22,476 Early retirement program 536 6,198 — Loss on sale of securities 28,393 20,609 278 Branch right sizing, net 2,746 5,467 3,628 Day 2 CECL Provision — — 33,779 Tax effect (1) (8,915) (11,556) (15,012) Certain items, net of tax 25,194 32,659 42,428 Adjusted earnings (non-GAAP) $ 177,887 $ 207,716 $ 298,840 Diluted earnings per share $ 1.21 $ 1.38 $ 2.06 Certain items: Termination of vendor and software services — — — Loss from early retirement of TruPS — — — Gain on sale of intellectual property — — (0.01) Gain on insurance settlement — — (0.03) FDIC special assessment 0.02 0.08 — Donation to Simmons First Foundation — — 0.01 Merger related costs — 0.01 0.18 Early retirement program — 0.05 — Loss on sale of securities 0.23 0.17 — Branch right sizing, net 0.02 0.04 0.03 Day 2 CECL Provision — — 0.28 Tax effect (1) (0.07) (0.09) (0.12) Certain items, net of tax 0.20 0.26 0.34 Adjusted diluted earnings per share (non-GAAP) $ 1.41 $ 1.64 $ 2.40 _________________________ (1) Effective tax rate of 26.135%. 63 See Table 20 below for the reconciliations of adjusted noninterest income, adjusted noninterest expense, adjusted salaries and employee benefits expense and adjusted deposit insurance expense for the periods presented.
The decrease in non-real estate loans related to business of $142.1 million, or 5.4%, was partially offset by the increase in agricultural loans of $27.1 million, or 13.2%. Other loans mainly consists of mortgage warehouse lending and municipal loans.
The decrease in non-real estate loans related to business of $56.0 million, or 2.2%, was partially offset by the increase in agricultural loans of $28.4 million, or 12.2%. Other loans mainly consists of mortgage warehouse lending and municipal loans.
There are no conditions or events since that notification that management believes have changed the bank’s categories. 59 Our risk-based capital ratios at December 31, 2023 and 2022 are presented in Table 18 below: Table 18: Risk-Based Capital December 31, (Dollars in thousands) 2023 2022 Tier 1 capital: Stockholders’ equity $ 3,426,488 $ 3,269,362 CECL transition provision 61,746 92,619 Goodwill and other intangible assets (1,398,810) (1,412,667) Unrealized loss on available-for-sale securities, net of income taxes 404,375 517,560 Total Tier 1 capital 2,493,799 2,466,874 Tier 2 capital: Subordinated notes and debentures 366,141 365,989 Subordinated debt phase out (66,000) — Qualifying allowance for credit losses and reserve for unfunded commitments 170,977 115,627 Total Tier 2 capital 471,118 481,616 Total risk-based capital $ 2,964,917 $ 2,948,490 Risk weighted assets $20,599,238 $20,738,727 Assets for leverage ratio $26,552,988 $26,407,061 Ratios at end of year: Common equity Tier 1 ratio (CET1) 12.11 % 11.90 % Tier 1 leverage ratio 9.39 % 9.34 % Tier 1 risk-based capital ratio 12.11 % 11.90 % Total risk-based capital ratio 14.39 % 14.22 % Minimum guidelines: Common equity Tier 1 ratio (CET1) 4.50 % 4.50 % Tier 1 leverage ratio 4.00 % 4.00 % Tier 1 risk-based capital ratio 6.00 % 6.00 % Total risk-based capital ratio 8.00 % 8.00 % Regulatory Capital Changes In December 2018, the Federal Reserve, Office of the Comptroller of the Currency and Federal Deposit Insurance Corporation (“FDIC”) (collectively, the “agencies”) issued a final rule revising regulatory capital rules in anticipation of the adoption of ASU 2016-13 that provided an option to phase in over a three year period on a straight line basis the day-one impact of the adoption on earnings and Tier 1 capital (the “CECL Transition Provision”).
There are no conditions or events since that notification that management believes have changed the bank’s categories. 59 Our risk-based capital ratios at December 31, 2024 and 2023 are presented in Table 18 below: Table 18: Risk-Based Capital December 31, (Dollars in thousands) 2024 2023 Tier 1 capital: Stockholders’ equity $ 3,528,872 $ 3,426,488 CECL transition provision 30,873 61,746 Goodwill and other intangible assets (1,385,128) (1,398,810) Unrealized loss on available-for-sale securities, net of income taxes 360,910 404,375 Total Tier 1 capital 2,535,527 2,493,799 Tier 2 capital: Subordinated notes and debentures 366,293 366,141 Subordinated debt phase out (132,000) (66,000) Qualifying allowance for credit losses and reserve for unfunded commitments 222,313 170,977 Total Tier 2 capital 456,606 471,118 Total risk-based capital $ 2,992,133 $ 2,964,917 Risk weighted assets $20,473,960 $20,599,238 Assets for leverage ratio $26,037,459 $26,552,988 Ratios at end of year: Common equity Tier 1 ratio (CET1) 12.38 % 12.11 % Tier 1 leverage ratio 9.74 % 9.39 % Tier 1 risk-based capital ratio 12.38 % 12.11 % Total risk-based capital ratio 14.61 % 14.39 % Minimum guidelines: Common equity Tier 1 ratio (CET1) 4.50 % 4.50 % Tier 1 leverage ratio 4.00 % 4.00 % Tier 1 risk-based capital ratio 6.00 % 6.00 % Total risk-based capital ratio 8.00 % 8.00 % Regulatory Capital Changes In December 2018, the Federal Reserve, Office of the Comptroller of the Currency and Federal Deposit Insurance Corporation (“FDIC”) (collectively, the “agencies”) issued a final rule revising regulatory capital rules in anticipation of the adoption of ASU 2016-13 that provided an option to phase in over a three year period on a straight line basis the day-one impact of the adoption on earnings and Tier 1 capital (the “CECL Transition Provision”).
Table 7: Loan Portfolio Years Ended December 31, (In thousands) 2023 2022 2021 2020 2019 Consumer: Credit cards $ 191,204 $ 196,928 $ 187,052 $ 188,845 $ 204,802 Other consumer 127,462 152,882 168,318 202,379 249,694 Total consumer 318,666 349,810 355,370 391,224 454,496 Real Estate: Construction and development 3,144,220 2,566,649 1,326,371 1,596,255 2,236,861 Single family residential 2,641,556 2,546,115 2,101,975 1,880,673 2,442,064 Other commercial 7,552,410 7,468,498 5,738,904 5,746,863 6,205,599 Total real estate 13,338,186 12,581,262 9,167,250 9,223,791 10,884,524 Commercial: Commercial 2,490,176 2,632,290 1,992,043 2,574,386 2,495,516 Agricultural 232,710 205,623 168,717 175,905 315,454 Total commercial 2,722,886 2,837,913 2,160,760 2,750,291 2,810,970 Other 465,932 373,139 329,123 535,591 275,714 Total loans before allowance for credit losses $ 16,845,670 $ 16,142,124 $ 12,012,503 $ 12,900,897 $ 14,425,704 Table 8 reflects the remaining maturities and interest rate sensitivity of loans at December 31, 2023.
Table 7: Loan Portfolio Years Ended December 31, (In thousands) 2024 2023 2022 2021 2020 Consumer: Credit cards $ 181,675 $ 191,204 $ 196,928 $ 187,052 $ 188,845 Other consumer 127,319 127,462 152,882 168,318 202,379 Total consumer 308,994 318,666 349,810 355,370 391,224 Real Estate: Construction and development 2,789,249 3,144,220 2,566,649 1,326,371 1,596,255 Single family residential 2,689,946 2,641,556 2,546,115 2,101,975 1,880,673 Other commercial 7,912,336 7,552,410 7,468,498 5,738,904 5,746,863 Total real estate 13,391,531 13,338,186 12,581,262 9,167,250 9,223,791 Commercial: Commercial 2,434,175 2,490,176 2,632,290 1,992,043 2,574,386 Agricultural 261,154 232,710 205,623 168,717 175,905 Total commercial 2,695,329 2,722,886 2,837,913 2,160,760 2,750,291 Other 610,083 465,932 373,139 329,123 535,591 Total loans before allowance for credit losses $ 17,005,937 $ 16,845,670 $ 16,142,124 $ 12,012,503 $ 12,900,897 Table 8 reflects the remaining loan maturities by interest rate type at December 31, 2024.
We had no gross realized gains and $20.6 million of gross realized losses from the sale of securities during the year ended December 31, 2023, compared to $46,000 of gross realized gains and $324,000 of gross realized losses from the call of securities during the year ended December 31, 2022.
We had no gross realized gains and $28.4 million of gross realized losses from the sale of securities during the year ended December 31, 2024, compared to no gross realized gains and $20.6 million of gross realized losses from the sale of securities during the year ended December 31, 2023.
Table 9: Non-performing Assets Years Ended December 31, (Dollars in thousands) 2023 2022 2021 2020 2019 Nonaccrual loans (1) $ 83,325 $ 58,434 $ 68,204 $ 122,879 $ 93,330 Loans past due 90 days or more (principal or interest payments) 1,147 507 349 578 856 Total non-performing loans 84,472 58,941 68,553 123,457 94,186 Other non-performing assets: Foreclosed assets held for sale and other real estate owned 4,073 2,887 6,032 18,393 19,121 Other non-performing assets 1,726 644 1,667 2,016 1,964 Total other non-performing assets 5,799 3,531 7,699 20,409 21,085 Total non-performing assets $ 90,271 $ 62,472 $ 76,252 $ 143,866 $ 115,271 Performing FDMs (formerly TDRs) $33,577 $1,849 $4,289 $3,138 $5,887 Allowance for credit losses to non-performing loans 267 % 334 % 300 % 193 % 72 % Non-performing loans to total loans 0.50 % 0.37 % 0.57 % 0.96 % 0.65 % Non-performing assets (including performing FDMs (formerly TDRs)) to total assets 0.45 % 0.23 % 0.33 % 0.66 % 0.57 % Non-performing assets to total assets 0.33 % 0.23 % 0.31 % 0.64 % 0.54 % _________________________ (1) Includes nonaccrual FDMs (formerly known as TDRs) of approximately $282,000, $1.6 million, $2.7 million, $4.4 million and $1.6 million at December 31, 2023, 2022, 2021, 2020 and 2019, respectively.
Table 9: Non-performing Assets Years Ended December 31, (Dollars in thousands) 2024 2023 2022 2021 2020 Nonaccrual loans (1) $ 110,154 $ 83,325 $ 58,434 $ 68,204 $ 122,879 Loans past due 90 days or more (principal or interest payments) 603 1,147 507 349 578 Total non-performing loans 110,757 84,472 58,941 68,553 123,457 Other non-performing assets: Foreclosed assets held for sale and other real estate owned 9,270 4,073 2,887 6,032 18,393 Other non-performing assets 1,202 1,726 644 1,667 2,016 Total other non-performing assets 10,472 5,799 3,531 7,699 20,409 Total non-performing assets $ 121,229 $ 90,271 $ 62,472 $ 76,252 $ 143,866 Allowance for credit losses to non-performing loans 212 % 267 % 334 % 300 % 193 % Non-performing loans to total loans 0.65 % 0.50 % 0.37 % 0.57 % 0.96 % Non-performing assets to total assets 0.45 % 0.33 % 0.23 % 0.31 % 0.64 % _________________________ (1) Includes nonaccrual financial difficulty modifications (formerly known as troubled debt restructurings) of approximately $597,000, $282,000, $1.6 million, $2.7 million and $4.4 million at December 31, 2024, 2023, 2022, 2021 and 2020, respectively.
Table 14: Average Deposit Balances and Rates December 31, 2023 2022 2021 (In thousands) Average Amount Average Rate Paid Average Amount Average Rate Paid Average Amount Average Rate Paid Noninterest bearing transaction accounts $ 5,201,384 — % $ 5,827,160 — % $ 4,836,839 — % Interest bearing transaction and savings deposits 11,033,263 2.17 % 12,253,164 0.51 % 10,638,665 0.18 % Time deposits 6,038,640 3.87 % 3,094,747 1.16 % 2,804,851 0.77 % Total $ 22,273,287 2.12 % $ 21,175,071 0.47 % $ 18,280,355 0.23 % Our maturities of time deposits not covered by deposit insurance at December 31, 2023 are presented in Table 15.
Table 14: Average Deposit Balances and Rates December 31, 2024 2023 2022 (In thousands) Average Amount Average Rate Paid Average Amount Average Rate Paid Average Amount Average Rate Paid Noninterest bearing transaction accounts $ 4,576,022 — % $ 5,201,384 — % $ 5,827,160 — % Interest bearing transaction and savings deposits 10,974,529 2.81 % 11,033,263 2.17 % 12,253,164 0.51 % Time deposits 6,411,888 4.55 % 6,038,640 3.87 % 3,094,747 1.16 % Total $ 21,962,439 2.73 % $ 22,273,287 2.12 % $ 21,175,071 0.47 % Our maturities of time deposits not covered by deposit insurance at December 31, 2024 are presented in Table 15.
Our annualized net charge-offs to total loans for 2023 was 0.12%. Excluding credit cards, the annualized net charge-offs to total loans for the same period was 0.09%.
Our annualized net charge-offs to total loans for 2024 was 0.22%. Excluding credit cards, the annualized net charge-offs to total loans for the same period was 0.19%.
Other Borrowings and Subordinated Debentures Our total debt was $1.34 billion and $1.23 billion at December 31, 2023 and 2022, respectively. The outstanding balance for December 31, 2023 includes $953.2 million in FHLB advances; $366.1 million in subordinated notes and unamortized debt issuance costs; and $19.1 million of other long-term debt.
Other Borrowings and Subordinated Debentures Our total debt was $1.11 billion and $1.34 billion at December 31, 2024 and 2023, respectively. The outstanding balance for December 31, 2024 includes $727.9 million in FHLB advances; $366.3 million in subordinated notes and unamortized debt issuance costs; and $17.4 million of other long-term debt.
Nonaccrual loans increased by $24.9 million during 2023, in addition to an increase in foreclosed assets held for sale of $1.2 million. The increase in nonaccrual assets was primarily due to an increase in nonaccrual loans within our commercial loan portfolio.
Nonaccrual loans increased by $24.9 million during 2023, in addition to an increase in foreclosed assets held for sale of $1.2 million. The increase in nonaccrual loans was primarily due to an increase in nonaccrual loans within our commercial loan portfolio. Total non-performing assets decreased by $13.8 million from December 31, 2021 to December 31, 2022.
Noninterest expense for 2023 was $563.1 million, as compared to noninterest expense for 2022 of $566.7 million, a decrease of $3.7 million, or 0.7%, compared to the prior period.
Noninterest expense for 2024 was $557.5 million, as compared to noninterest expense for 2023 of $563.1 million, a decrease of $5.5 million, or 1.0%, compared to the prior period.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

18 edited+1 added−1 removed12 unchanged
Biggest changeOur liquidity sources are prioritized for both availability and time to activation. Our liquidity is a primary consideration in determining funding needs and is an integral part of asset/liability management. Pricing of the liability side is a major component of interest margin and spread management. Adequate liquidity is a necessity in addressing this critical task.
Biggest changeSources of liquidity are managed so that reliance on any one funding source is kept to a minimum. Our liquidity sources are prioritized for both availability and time to activation. Our liquidity is a primary consideration in determining funding needs and is an integral part of asset/liability management.
We also use securities held in the securities portfolio to pledge when obtaining public funds. 66 Sixth, we have a network of downstream correspondent banks from which we can access debt to meet liquidity needs. Finally, we have the ability to access funds through the Federal Reserve Bank Discount Window.
We also use securities held in the securities portfolio to pledge when obtaining public funds. Sixth, we have a network of downstream correspondent banks from which we can access debt to meet liquidity needs. Finally, we have the ability to access funds through the Federal Reserve Bank Discount Window.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Liquidity and Market Risk Management Parent Company The Company has leveraged its investment in its subsidiary bank and depends upon the dividends paid to it, as the sole shareholder of the subsidiary bank, as a principal source of funds for dividends to shareholders, stock repurchases and debt service requirements.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Liquidity and Market Risk Management Parent Company The Company has leveraged its investment in Simmons Bank and depends upon the dividends paid to it, as the sole shareholder of Simmons Bank, as a principal source of funds for dividends to shareholders, stock repurchases and debt service requirements.
Since these correlations are based on competitive and market conditions, we anticipate that our future results will likely be different from the foregoing estimates, and such differences could be material. The table below presents our sensitivity to net interest income at December 31, 2023.
Since these correlations are based on competitive and market conditions, we anticipate that our future results will likely be different from the foregoing estimates, and such differences could be material. The table below presents our sensitivity to net interest income at December 31, 2024.
Approximately $5.4 billion of these lines of credit are currently available, if needed, for liquidity. A third source of liquidity is that we have the ability to access large wholesale deposits from both the public and private sector to fund short-term liquidity needs.
Approximately $4.72 billion of these lines of credit are currently available, if needed, for liquidity. A third source of liquidity is that we have the ability to access large wholesale deposits from both the public and private sector to fund short-term liquidity needs.
Fifth, we use a laddered investment portfolio that ensures there is a steady source of intermediate term liquidity. These funds can be used to meet seasonal loan patterns and other intermediate term balance sheet fluctuations. Approximately 45.8% of the investment portfolio is classified as available-for-sale, and we may generate additional liquidity through opportunistic sales of investment securities.
Fifth, we use a laddered investment portfolio that ensures there is a steady source of intermediate term liquidity. These funds can be used to meet seasonal loan patterns and other intermediate term balance sheet fluctuations. Approximately 41.0% of the investment portfolio is classified as available-for-sale, and we may generate additional liquidity through opportunistic sales of investment securities.
We believe the various sources available are ample liquidity for short-term, intermediate-term and long-term liquidity. Market Risk Management Market risk arises from changes in interest rates. We have risk management policies to monitor and limit exposure to market risk. In asset and liability management activities, policies designed to minimize structural interest rate risk are in place.
We believe these various sources of available liquidity are sufficient for short-term, intermediate-term and long-term liquidity. Market Risk Management Market risk arises from changes in interest rates. We have risk management policies to monitor and limit exposure to market risk. In asset and liability management activities, policies designed to minimize structural interest rate risk are in place.
Subsidiary Bank Generally speaking, the Company’s subsidiary bank relies upon net inflows of cash from financing activities, supplemented by net inflows of cash from operating activities, to provide cash used in investing activities.
Subsidiary Bank Generally speaking, Simmons Bank relies upon net inflows of cash from financing activities, supplemented by net inflows of cash from operating activities, to provide cash used in investing activities.
As of December 31, 2023, the Bank had approximat ely $510.0 million in f ederal funds lines of credit from upstream correspondent banks that can be accessed, when needed. In order to ensure availability of these upstream funds we test these borrowing lines at least annually.
As of December 31, 2024, the Bank had approximat ely $435.0 million in f ederal funds lines of credit from upstream correspondent banks that can be accessed, if and when needed. In order to ensure availability of these upstream funds we test these borrowing lines at least annually.
At December 31, 2023, undivided profits of Simmons Bank were approximately $622.9 million, of which approximately $54.4 million was available for the payment of dividends to the Company without regulatory approval. In addition to dividends, other sources of liquidity for the Company are the sale of equity securities and the borrowing of funds.
At December 31, 2024, undivided profits of Simmons Bank were approximately $550.4 million, none of which were available for the payment of dividends to the Company without regulatory approval. In addition to dividends, other sources of liquidity for the Company are the sale of equity securities and the borrowing of funds.
As of December 31, 2023, the model simulations projected that 100 and 200 basis point increases in interest rates would result in negative variances in net interest income of 2.72% and 5.57%, respectively, relative to the base case over the next 12 months.
As of December 31, 2024, the model simulations projected that 100 and 200 basis point increases in interest rates would result in negative variances in net interest income of 1.70% and 3.78%, respectively, relative to the base case over the next 12 months.
Interest rate decreases of 100 and 200 basis points would result in positive variances in net interest income of 2.18% and 5.36%, respectively, relative to the base case over the next 12 months.
Interest rate decreases of 100 and 200 basis points would result in positive variances in net interest income of 0.89% and 1.81%, respectively, relative to the base case over the next 12 months.
There are seven primary and secondary sources of liquidity available to the Company. The particular liquidity need and timeframe determine the use of these sources. The first source of liquidity available to the Company is federal funds. Federal funds are available on a daily basis and are used to meet the normal fluctuations of a dynamic balance sheet.
The first source of liquidity available to the Company is federal funds. Federal funds are available on a daily basis and are used to meet the normal fluctuations of a dynamic balance sheet.
Management uses simulation models to estimate the effects of changing interest rates and various balance sheet strategies on the level of the Company’s net income and capital.
A number of tools are used to monitor and manage interest rate risk, including simulation models and interest sensitivity gap analysis. Management uses simulation models to estimate the effects of changing interest rates and various balance sheet strategies on the level of the Company’s net income and capital.
Internal corporate guidelines have been established to constantly measure liquid assets as well as relevant ratios concerning earning asset levels and purchased funds. The management and Board of Directors of the subsidiary bank monitor these same indicators and makes adjustments as needed.
Internal corporate guidelines have been established to constantly measure liquid assets as well as relevant ratios concerning earning asset levels and purchased funds.
The measurement of market risk associated with financial instruments is meaningful only when all related and offsetting on- and off-balance-sheet transactions are aggregated, and the resulting net positions are identified.
The measurement of market risk associated with financial instruments is meaningful only when all related and offsetting on- and off-balance-sheet transactions are aggregated, and the resulting net positions are identified. 67 Interest Rate Sensitivity Interest rate risk represents the potential impact of interest rate changes on net income and capital resulting from mismatches in repricing opportunities of assets and liabilities over a period of time.
Liquidity Management The objective of our liquidity management is to access adequate sources of funding to ensure that cash flow requirements of depositors and borrowers are met in an orderly and timely manner. Sources of liquidity are managed so that reliance on any one funding source is kept to a minimum.
The management and Board of Directors of the subsidiary bank monitor these same indicators and makes adjustments as needed. 66 Liquidity Management The objective of our liquidity management is to access adequate sources of funding to ensure that cash flow requirements of depositors and borrowers are met in an orderly and timely manner.
Table 24: Net Interest Income Sensitivity Interest Rate Scenario % Change from Base Up 200 basis points (5.57) % Up 100 basis points (2.72) % Down 100 basis points 2.18 % Down 200 basis points 5.36 % 67
Table 24: Net Interest Income Sensitivity Interest Rate Scenario % Change from Base Up 200 basis points (3.78) % Up 100 basis points (1.70) % Down 100 basis points 0.89 % Down 200 basis points 1.81 % 68
Removed
Interest Rate Sensitivity Interest rate risk represents the potential impact of interest rate changes on net income and capital resulting from mismatches in repricing opportunities of assets and liabilities over a period of time. A number of tools are used to monitor and manage interest rate risk, including simulation models and interest sensitivity gap analysis.
Added
Pricing of the liability side is a major component of interest margin and spread management. Adequate liquidity is a necessity in addressing this critical task. There are seven primary and secondary sources of liquidity available to the Company. The particular liquidity need and timeframe determine the use of these sources.

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